Share and Care International 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.

Question

Share and Care International 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.

Quizplus · Accepted Answer

To find the number of clients needed to cover costs and achieve the targeted profit, use the formula: (Fixed Costs + Target Profit) / (Average Fee - Variable Cost per Client). Here, it is ($28,000 + $26,000) / ($1,400 - $800) = 90 clients.

Share and Care International Is Trying to Determine How Many