Ford Legal Services (FLS) is considering adding a new line of simplified wills and estate plans to its current family law practice. This new service will target individuals who are currently not clients and whose legal needs are modest, but who prefer to have their wills and estate plans personally drafted. FLS estimates the follow prices and costs for the new service.
Client fee
$ 1,290
Variable cost per client
$ 840
Fixed costs per year associated with this product
$ 92,250
Income tax rate
22%
Required:
Compute Ford Legal Service's break-even point in clients per year for this new service.
How many clients must Ford Legal Services attract to earn $87,750 per year after taxes for this new service?
Compute Ford Legal Service's break-even point in clients per year for this new service.
Note: Round up your answers to the nearest whole number.
Break-even point
clients
How many clients must Ford Legal Services attract to earn $87,750 per year after taxes for this new service?
Note: Round up your answers to the nearest whole number.
Number of clients