# Health-Temp Company is a placement agency for temporary nurses. It - 15959

Solution Posted by

## yousafbhutta

Rating : (28)C
Solution Detail
Price: \$3.00
• Posted on: Wed 27 Mar, 2013
• Request id: None
• Purchased: 0 time(s)
• Average Rating: No rating
Request Description

Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year. Health-Temp charges the hospitals and clinics \$90 per hour and has variable costs of \$75.60 per hour (this includes the payment to the nurse). Total fixed costs equal \$321,000.

Required:

1. Calculate the contribution margin per unit and the contribution margin ratio. If required, round your answers to the two decimal places.

 Contribution margin per unit Contribution margin ratio

2. Calculate the sales revenue needed to break even.

3. Calculate the sales revenue needed to achieve a target profit of \$100,000.

4. What if Health-Temp had target operating income (profit) of \$110,000? Would sales revenue be larger or smaller than the one calculated in Requirement 3?

By how much?

Solution Description

Cornerstone Exercise 16.3
Break-Even Sales: Sales for Target Profit

Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan area. Health-Temp Company believes it will place temporary nurses for a total of 23,500 hours next year. Health-Temp charges the hospitals and clinics \$90 per hour and has variable costs of \$75.60 per hour (this includes the payment to the nurse). Total fixed costs equal \$321,000.

Required:

Attachments