Park & Morgan, a law firm, is considering opening a legal clinic for midde- and low income clients. The clinic would bill at a rate if $18 per hour. It would employ law sudents as paraprofessional help and pay them $9 per hour. Other variable costs are anticipated to be $5.40 per hour, and annual fixed costs are expected to total $27,000.
1. Compute the breakeven point in billable hours
2. Compute the breakeven point in total billings.
3. Find the new breakeven point in total billings if fixed costs go up by $2340.
4. Using the original figures, compute the breakeven point in total billings if the billing rate decreases by $1 per hour, other variable costs decrease by $0.40 per hour, and fixed costs go down by $3600
Please explain your answers so I can better understand how to do these problems.