R&R; Tax Service offers tax and consulting services to individuals and small bus
ID: 2509432 • Letter: R
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 4:3:3 (easy, moderate, business). Fixed costs total $20,155 for the tax season Type of Return Easy (form 1040EZ) Moderate (form 1040) Business Fee Charged $ 38 113 263 Variable Cost per Return $ 24 69 94 (1) Determine the selling price per composite unit. Ratio Fee Charged Total per composite unit Easy (form 1040EZ) Moderate (form 1040) Business 4 (2) Determine the variable costs per composite unit. Ratio Variable cost per return Total per composite unit Easy (form 1040EZ) Moderate (form 1040) BusinessExplanation / Answer
1. Detrmine the Selling Price per Composite Unit ratio Fee Charged Total per Composite unit Easy(form 1040EZ) 4 $ 38 $ 152 Moderate (form 1040) 3 $ 113 $ 339 Business 3 $ 263 $ 789 1280 1. Detrmine the Variable Cost per Composite Unit ratio Variable Cost per return Total per Composite unit Easy(form 1040EZ) 4 $ 24 $ 96 Moderate (form 1040) 3 $ 69 $ 207 Business 3 $ 94 $ 282 585 Contributuion Margin per Composite Unit Total sellong Price per Composite Unit - Tial Variable cost per composite unit 1280 - 585 $ 695 3. Determine the Break Even Points in Composite Units Fixed Cost / Contribution Margin per Composite Unit 20155 / 695 29 units 4. Determine the number of units of each product that will be sold at break even point Number per composite unit Number of Composite Units to break even Units sales at the break even point Easy(form 1040EZ) 4 29 116 Moderate (form 1040) 3 29 87 Business 3 29 87 290
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