Joe's Tax Service prepares tax returns for low-to middle-income taxpayers. Its service operates January 2 through April
Question:
Joe's Tax Service prepares tax returns for low-to middle-income taxpayers. Its service operates January 2 through April 15 at a counter in a local grocery store. All jobs are classified into one of three categories: standard, multiform, and complex. Following is information for last year. Also, last year, the fixed cost of rent, utilities, and so forth were $60,000.
Multiple Product Break-Even Analysis
Joe's Tax Service prepares tax returns for low-to middle-income taxpayers. Its service operates January 2 through Ap 15 a a counter in a local grocery store. All jobs are classified into one of three categories: standard, multiform, and complex. Following is information for last year. Also, last year, the fixed cost of rent, utilities, and so forth were $60,000.
Standard | Multiform | Complex | |
---|---|---|---|
Billing rate | $135 | $260 | |
Average variable costs | (30) | (75) | (150) |
Average contribution margin | $30 | $60 | $110 |
Number of returns prepared | 1,750 | 500 | 250 |
Required
(a.) Determine Joe's break-even dollar sales volume.
-Round contribution margin to three decimal places.
-Round break-even sales volume to the nearest dollar
Product | Weighted Selling Price | Weighted Contribution Margin |
---|---|---|
Standard | ||
Multiform | ||
Complex | ||
Total |
Contribution margin ratio:
Break-even sales volume:
(b.) Determine Joe's margin of safety in sales dollars.
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds