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Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax returns have the following characteristics. Individuals $ 290 Partnerships
Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax returns have the following characteristics. Individuals $ 290 Partnerships $ 1,200 Corporations $ 1,950 Price charged per tax return Variable cost per tax return (including wage paid to tax preparer) Expected tax returns prepared per year $ 250 48,000 $ 1,100 6,000 $ 1,780 6,000 The total fixed costs per year for the company are $501,500. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. Suppose the product sales mix changes so that for every ten tax returns prepared, six are for individuals, one is for a partnership, and three are for corporations. Now what is the break-even volume for Sell Block? c
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