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Multiple Product Break-Even Analysis Joe's Tax Service provides professional accounting and tax services. All tax return services are classified into one of three categories: standard,

Multiple Product Break-Even Analysis 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 $70,000.

Standard Multiform Complex
Billing rate $70 $145 $270
Average variable costs (30) (75) (150)
Average contribution margin $40 $70 $120
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. $Answer

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