ndry Associates offers a variety of 9. MULTIPLE PRODUCT BREAKEVEN POINT. Ta vari
ID: 2332014 • Letter: N
Question
ndry Associates offers a variety of 9. MULTIPLE PRODUCT BREAKEVEN POINT. Ta variable costs per job completed but low fixed costs. In fact, it only costs Roger Tando $25,000 a month in fixed costs to run his business. The details on tax and accounting services for local small businesses. It is a simple operation, with hich the various products Tandry offers are in the table below. Tandry Associates Price per Month $500 $750 $1,000 $600 $500 Variable Cost per Month Product Jobs Sold Basic Bookkeeping Tax Preparation Audit Services Billing Services Payroll Services $400 $600 $900 $500 $400 100 50 25 50 75Explanation / Answer
Answers
Basic Book Keeping
Tax Preparation
Audit Services
Billing Service
Payroll services
TOTAL
Job Sold
100
50
25
50
75
300
Product Mix
33.33%
16.67%
8.33%
16.67%
25.00%
100.00%
Working
Basic Book Keeping
Tax Preparation
Audit Services
Billing Service
Payroll services
TOTAL
A
Contribution Margin per unit
$ 100.00
$ 150.00
$ 100.00
$ 100.00
$ 100.00
B
Jobs sold
100
50
25
50
75
C = A x B
Total Contribution Margin earned
$ 10,000.00
$ 7,500.00
$ 2,500.00
$ 5,000.00
$ 7,500.00
$ 32,500.00
Answer = Tandry’s package Contribution margin = $ 32,500
---Working for Weighted Average Contribution margin---
Working
Basic Book Keeping
Tax Preparation
Audit Services
Billing Service
Payroll services
TOTAL
A
Price per month
$ 500.00
$ 750.00
$ 1,000.00
$ 600.00
$ 500.00
B
Variable Cost per unit
$ 400.00
$ 600.00
$ 900.00
$ 500.00
$ 400.00
C = A - B
Contribution Margin per unit
$ 100.00
$ 150.00
$ 100.00
$ 100.00
$ 100.00
D
Product Mix
33.33%
16.67%
8.33%
16.67%
25.00%
100.00%
E = C x D
Weighted Average Contribution Margin
$ 33.33
$ 25.00
$ 8.33
$ 16.67
$ 25.00
$ 108.33
Answer
A
Total Fixed Cost
$ 25,000.00
B
Weighted Average Contribution Margin
$ 108.33
C = A/B
Multi Product Break Even point [Answer]
231
No. of jobs to be sold: [ANSWERS]
C x 33.33%
Basic Book Keeping
77
C x 16.67%
Tax Preparation
38
C x 8.33%
Audit Services
19
C x 16.67%
Billing Service
38
C x 25%
Payroll services
58
Working
Basic Book Keeping
Tax Preparation
Audit Services
Billing Service
Payroll services
TOTAL
A
Contribution Margin per unit
$ 100.00
$ 150.00
$ 100.00
$ 100.00
$ 100.00
B
Jobs sold
100
50
25
50
75
C = A x B
Total Contribution Margin earned
$ 10,000.00
$ 7,500.00
$ 2,500.00
$ 5,000.00
$ 7,500.00
$ 32,500.00
D
Total Fixed Cost
$ 25,000.00
E = C - D
Current Profits
$ 7,500.00
Answer: Current Profits = $ 7,500
Basic Book Keeping
Tax Preparation
Audit Services
Billing Service
Payroll services
TOTAL
Job Sold
100
50
25
50
75
300
Product Mix
33.33%
16.67%
8.33%
16.67%
25.00%
100.00%
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