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. 

Answer rating: 100% (QA)

Solution a Product Weighted Selling Price Weighted Contri... View the full answer