Question
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 $55,000.
Standard | Multiform | Complex | |||
---|---|---|---|---|---|
Billing rate | $55 | $130 | $255 | ||
Average variable costs | (30) | (75) | (150) | ||
Average contribution margin | $25 | $55 | $105 | ||
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 dollar.
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