Question

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 $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	1750	500	250

(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	????	????
Multiform	????	????
Complex	????	????
Total	????	????
Contribution Margin Ratio	N/A	????
Break-even sales volume	N/A	????

(b.) Determine Joe's margin of safety in sales dollars.

Round answer to the nearest whole number.

Answer 1

Step- 1 Broduct unit Selumg Pri ce Stamdand 65x 17S0 2500 $45.5 muhibom l40 x S00 2 So0 $28 Compex 265 250 2500 $26.5 tee 2 Pgroduct antt Contibubion mir mangin Standard 3sx 17s0 2500 24.5 mutbom 13 2500 Complex IISX 2S0 2S00 we ighted ellrmg Poice weghted Contabu hen Paroduct margm Standand $24.5 13 $ 23 mubAsm 11.S 26 5 s 100 Complex $49 Total 49 Too Con tabution margn Therelse Boeak Even 65600 499. Sales tn oleme) - $132,6 53 V

Caver Actucl ales $259000 1 (32653) Boeak Even Sales 173 Mangm of Safety
Thank you

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