# Financial and Managerial Accounting: P20-43 Daniels Consulting provides consulting service

**Financial and Managerial Accounting**

**P20-43 Computing the break-even sales and sales needed to earn a target profit; performing sensitivity analysis**

*This problem continues the Daniels Consulting situation from Problem P19-44 of Chapter 19.*

Daniels Consulting provides consulting service at an average price of $120 per hour and incurs variable cost of $60 per hour. Assume average fixed costs are $3,900 a month.

Requirements:

1. What is the number of hours that must be billed to reach the breakeven point?

2. If Daniels desires to make a profit of $4,500, how many consulting hours must be completed?

3. Daniels thinks it can reduce fixed cost to $3,190 per month, but variable cost will increase to $62 per hour. What is the new breakeven point in hours?

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