Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The...
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Accounting
Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax returns have the following characteristics:
Individuals
Partnerships
Corporations
Price charged per tax return
$
240
$
1,250
$
2,150
Variable cost per tax return (including wage paid to tax preparer)
$
195
$
1,150
$
1,970
Expected tax returns prepared per year
64,000
8,000
8,000
The total fixed costs per year for the company are $582,400.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
Anticipated profit: __________
b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
Break-even point: __________
c. Suppose the product sales mix changes so that, for every ten tax returns prepared, six are for individuals, one is for a partnership, and three are for corporations. Now what is the break-even volume for Sell Block?
Break-even point: __________
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