Question

R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs of three types of tax returns follow. R&R provides services in the ratio of 4:4:2 (easy, moderate, business). Fixed costs total $14,520 for the tax season. Type of Return Easy (form 1040EZ) Moderate (form 1040) Business Fee Charged $ 56 131 281 Variable Cost per Return $ 33 78 103 Fee Charged Total per composite unit (1) Determine the selling price per composite unit. Ratio Easy (form 1040EZ) Moderate (form 1040) Business 21 Total per composite unit (2) Determine the variable costs per composite unit. Ratio Variable cost per return Easy (form 1040EZ) Moderate (form 1040) Business Contribution margin per composite unit $ 0.00 0.00 Contribution margin (3) Determine the break-even point in composite units. Choose Numerator: Choose Denominator: Break Even Units Break even units (4) Determine the number of units of each product that will be sold at the break-even point. Number per Number of composite units Units sales at the break-even point composite unit to break even. Easy (form 1040EZ) Moderate (form 1040) Business

Answer 1

в А 1 1) 2 Total Sales value 3 Type of return 4 Easy (form 104EZ) 5 Moderate (form 1040) 6 Business Ratio 56 Fess charged Total Fees received 224 131) 281) 13101 524 562 7 9 2) 10 Total cost per composite unit Ratio 331 11 12 Easy (form 104EZ) 13 Moderate (form 1040) 14 Business 15 16 Variable cost Variable cost per per return composite unit 132 78 312 103 206 Total 650 17 Contribution margin per composite unit 18 Particulars 19 Sales 20 Less:- Variable costs 21 Contribution margin 22 Amount 1310 650 660

233) 24 Break even point in composite units =Fixed costs/Contribution margin per unit 25 14520/660= 22 26 27 4) Number per Number of composite composite units (Unit sales at the unit to breakeven break-even point 28 22 887 29 Easy (Form 1040EZ) 30 Moderate (Form 1040) 31 Business 881 22 44 32 2201 33 34

Ratio Fess charged A 1 1) 2 Total Sales value 3 Type of return 4 Easy (form 104EZ) 5 Moderate (form 1040) 6 Business 7 56 131 281 Total Fees received =B4*C4 =B5*C5 =B6 C6 =SUM(D4:D6) 9 2 10 Total cost per composite unit Ratio 33 11 12 Easy (form 104EZ) 13 Moderate (form 1040) 14 Business 15 4 Variable cost per return Variable cost per composite unit =C12*B12 78 =C13*B13 1103 =C14%B14 Total =SUMD12:D14) 16 17 Contribution margin per composite unit 18 Particulars 19 Sales 20 Less:- Variable costs 21 Contribution margin 22 Amount =D7 =D15 =B19-B20

23 3) 24 Break even point in composite units =Fixed costs/Contribution margin per unit 25 =14520/660 26 27 4) Number per composite unit 28 29 Easy (Form 1040EZ) 30 Moderate (Form 1040) 31 Business 32 33 Number of composite units to breakeven =B25 =B25 =B25 Unit sales at the break-even point =B29*C29 =B30*C30 =B31*C31 =SUM(D29:D31)