Joe's Tax Service prepares tax returns for low-to middle-income taxpayers. Its service operates January 2 through April
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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 $65,000.
Standard | Multiform | Complex | |||
---|---|---|---|---|---|
Billing rate | $65 | $140 | $265 | ||
Average variable costs | (30) | (75) | (150) | ||
Average contribution margin | $35 | $65 | $115 | ||
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 | Answer | Answer |
Multiform | Answer | Answer |
Complex | Answer | Answer |
Total | Answer | Answer |
Contribution margin ratio: | Answer | |
Break-even sales volume: | Answer |
(b.) Determine Joe's margin of safety in sales dollars.
Round answer to the nearest whole number.
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