SHARE Is Trying to Determine How Many Clients Must Be

question 120

Multiple Choice

SHARE is trying to determine how many clients must be serviced in order to cover its monthly service overhead. Using the high-low method, it has determined that the variable cost per client is $800 and that the monthly fixed overhead is $28,000. Assuming an average fee of $1,400 per client and a targeted profit of $26,000, the number of clients to be serviced is

• A) 80 clients.
• B) 120 clients.
• C) 47 clients.
• D) 90 clients.

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Definitions:

M

A symbol often representing money supply in economic discussions, including various measures like M1, M2, and M3.

Q

Quantity, frequently used in economic equations and discussions to denote the amount of goods produced or consumed.

PQ

The product of price (P) and quantity (Q), often used in economics to calculate total revenue or expenditure.

P

Typically refers to "Price" in economic models, representing the monetary value assigned to a good or service in the market.