Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Multiple Product Break-Even Analysis Joe's Tax Service prepares tax returns for low-to middle-income taxpayers. Its service operates January 2 through April 15 at a counter
Multiple Product Break-Even Analysis 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 $60,000. Standard Multiform Complex Billing rate $60 $135 $260 Average variable costs (150) (30) (75) Average contribution margin $30 $60 $110 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. Weighted Weighted Selling Price Contribution Margin Product Standard 42 $ $ 21 Multiform 27 12 Complex 26 11 Total 95 $ 44 Contribution margin ratio: 0.4632 Break-even sales volume: 129,545.45 (b.) Determine Joe's margin of safety in sales dollars. Round answer to the nearest whole number. $107,955
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started