Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Joe's Tax Service provides professional accounting and tax services. All tax return services are classified into one of three categories: standard, multiform, and complex. Following

Joe's Tax Service provides professional accounting and tax services. All tax return services 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.

Joe's Tax Service provides professional accounting and tax services. All tax return services 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.

  • 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

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. Hint: Use weighted average billing rate.

Round answer to the nearest whole number.

Required (a.) Determine Joe's break-even dollar sales volume.

b. Determine Joe's margin of safety in sales dollars. Hint: Use weighted average billing rate.

Round answer to the nearest whole number.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost management a strategic approach

Authors: Edward J. Blocher, David E. Stout, Gary Cokins

5th edition

73526940, 978-0073526942

Students also viewed these Accounting questions