(Total cost determination with mixed cost) Magarity Accounting Services pays $800 per month for a tax software license. In addition, variable charges av¬ erage $6 for every tax return the firm prepares.

a. Determine the total cost and the cost per unit if the firm expects to pre¬ pare the following number of tax returns in March 2006:

1.500 2. 600 3. 1,200

b. Why does the cost per unit change in parts (1), (2), and (3)?

LO1.