Multiple Product Break-Even Analysis Joe's Tax Service prepares tax returns for low-to middle-income taxpayers. Its...
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Multiple Product Break-Even Analysis 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
1,750
500
250
Required (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
$Answer
$Answer
Multiform
Answer
Answer
Complex
Answer
Answer
Total
$ Answer
$ Answer
Contribution margin ratio:
Answer
Break-even sales volume:
$Answer
(b.) Determine Joe's margin of safety in sales dollars.
Round answer to the nearest whole number. $Answer
Answer & Explanation
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