Scenario 13-5
Samantha has been working for a law firm and earning an annual salary of $80,000.She decides to open her own practice.Her annual expenses will include $15,000 for office rent,$3,000 for equipment rental,$1,000 for supplies,$1,200 for utilities,and a $35,000 salary for a secretary/bookkeeper.Samantha will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500.
-Refer to Scenario 13-5.According to Samantha's accountant,which of the following revenue totals will yield her business $50,000 in profits?

Question

Quizplus · Accepted Answer

To calculate the revenue needed to yield $50,000 in profit, we need to subtract Samantha's expenses from her total revenue.

Total expenses:

- Office rent: $15,000 
- Equipment rental: $3,000 
- Supplies: $1,000 
- Utilities: $1,200 
- Secretary/bookkeeper salary: $35,000

Total expenses = $55,200

To find the revenue needed for a profit of $50,000:

Revenue needed = Total expenses + Desired profit

Revenue needed = $55,200 + $50,000

Revenue needed = $105,200

Therefore, Samantha will need a revenue of $105,200 to yield a profit of $50,000. The answer is B.

Scenario 13-5 Samantha Has Been Working for a Law Firm and Earning