SHARE Is Trying to Determine How Many Clients Must Be

question 139

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 $1,200 per client, the breakeven point per month is

• A) 35 clients.
• B) 80 clients.
• C) 70 clients.
• D) 55 clients.

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Definitions:

Independent Random Variables

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