Question

Will Jones, Oriole is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $680 annual fee plus $10 per tax return for a license to use Mega Tax software. (a) What is the company's total annual cost for the Mega Tax software if 200 returns are filed? If 340 returns are filed? If 500 returns are filed? $ Total cost for 200 returns Total cost for 340 returns Total cost for 500 returns $ $ (b) What is the company's cost per return for the Mega Tax software it 200 returns are filed? If 340 returns are filed? If 500 returns are filed? (Round answers to 2 decimal places, e.g. 52.75.) Cost per unit (200) $ Cost per unit (340) $ Cost per unit (500) $

Answer 1

A) Annual cost for the Mega Tax software

1) Total Cost for 200 returns = (200 returns x $10 per return) + $ 680 as annual fee = $ 2680.00

2) Total Cost for 340 returns = (340 returns x $10 per return) + $ 680 as annual fee = $ 4080.00

3) Total Cost for 500 returns = (500 returns x $10 per return) + $ 680 as annual fee = $ 5680.00

B) Cost per return for the Mega Tax software

1) Total Cost for 200 returns = $ 2680.00

Cost per return = $ 2680.00 / 200 returns = $ 13.40

2) Total Cost for 340 returns = $ 4080.00

Cost per return = $ 4080.00 / 340 returns = $ 12.00

3) Total Cost for 500 returns = $ 5680.00

Cost per return = $ 5680.00 / 500 returns = $ 11.36