Question

8) a firm is considering adding a second secretary to answer phone calls and make appointments. the cost of the secretary will be $10/hour and she will work 200 hours each month. if each new client adds $400 of profit to the firm, how many client appointments (per month) must the second secretary make for the firm to break even? (show your work)

Answer 1

The second secretary must schedule at least 5 client appointments per month for the firm to break even, as it costs the firm $2,000 monthly for the secretary and each new client adds $400 of profit.

Step-by-step explanation:

To determine how many client appointments the second secretary must make for the firm to break even, we need to calculate the total monthly cost of hiring the secretary and compare that to the profit made per client appointment. The secretary's monthly cost is $10/hour for 200 hours, which totals $2,000 per month.

Break-even point in client appointments is found by dividing the secretary's total monthly cost by the profit per client. So, the calculation would be:

Break-even point = Total monthly cost of secretary / Profit per client
Break-even point = $2,000 / $400

Break-even point = 5 clients

Therefore, the second secretary must schedule at least 5 appointments per month for the firm to break even.