Multiple Product Break$-$Even Analysis

TPG Tax & Accounting is a full$-$service CPA firm located in Apache Junction, Arizona. Assume that tax return services are classified into one of three categories: standard, complex, and full$-$service $($includes end$-$of$-$year bookkeeping with tax return preparation$).$ Assume that TPG$$s fixed costs $($rent$,$ utilities, wages, and so forth$)$ totaled $$180,000$ last year. Additional information from the prior year follows.

StandardComplexFull$-$ServiceBilling rate$$125$$$250$$$150$Average variable costs$(45)(65)(50)$Average contribution margin$$80$$$185$$$100$Number of returns prepared$1,000200800$

Required

$($a$.)$ Using sales dollar analysis, determine TPG$$s break$-$even dollar sales volume

Enter billing rates and contribution margins using all decimals, when needed.$$

Round contribution margin ratio to$$three decimal places.

Round break$-$even sales volume to the nearest dollar.

Product

Weighted

Billing Rate

Weighted

Contribution

Margin

StandardAnswer $1$

Answer $2$

ComplexAnswer $3$

Answer $4$

Full$-$ServiceAnswer $5$

Answer $6$

TotalAnswer $7$

Answer $8$

Contribution margin ratio:Answer $9$

Break$-$even sales volume:Answer $10$

$($b$.)$ Determine TPG$\text{'}$s margin of safety in sales dollars. Hint: Use weighted average billing rate.$$

$Answer $11$