Endeavour Ltd

question 106

Multiple Choice

Endeavour Ltd. is a management consulting firm specialising in pension plans. Its billing rate to clients is $120 per hour, and variable costs average $80 per hour. Fixed costs are $38,000 per month. The income tax rate is 20%. If variable costs increase by 20% and management increases its billing rate by 5%, what is the effect on the breakeven point, in billable hours?

• A) It increases the breakeven point.
• B) It decreases the breakeven point.
• C) The breakeven point will not change.
• D) Cannot be determined.

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Definitions:

Colorist Painting

A style of painting where color is the main focus, often used to convey emotions and atmospheres.

Form and Line

Fundamental elements of design and visual art, where "form" refers to the shape and structure of objects and "line" to the continuous mark or edge defining those forms.

Ingres

A French Neoclassical painter, renowned for his precision in drawing and clear line, as well as his masterful portrayal of the human form.

Pre-Raphaelite Brotherhood

A 19th-century English art movement whose members wished to create art free from what they considered the artificial manner propagated in the academies by the successors of Raphael.