Tandry Associates offers a variety of tax and accounting services for local small businesses. It is a simple operation, with high variable costs per job completed but low fixed costs. In fact, it only costs Roger Tandry $25,000 a month in fixed costs to run his business. The details on the various products Tandry offers are in the table below.

REQUIRED:

a. What is Tandry’s product mix?

b. What is Tandry’s package contribution margin?

c. Perform a multiproduct breakeven point for Tandry Associates. How many of each type of job does he need to sell in order to break even?

d. What is Tandry’s current profit for the business?

e. What is Tandry’s current margin of safety in terms of revenue dollars?

f. Tandry wants to make $10,000 per month before taxes. How many jobs of each type does he need to sell now? What is his required revenue dollars of sales?

g. Tandry wants this profit in after- tax dollars. He pays a 20% tax rate. How many jobs of each type does he need to sell now? What are his required revenue dollars of sales?

Transcribed Image Text:

Tandry Associates Variable Cost Product Price per Month per Month Jobs Sold Basic Bookkeeping $500 $400 100 Tax Preparation $750 $600 50 Audit Services $1,000 $900 25 Billing Services $600 $500 50 Payroll Services $500 $400 75