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Question: joes tax service prepares tax returns for lowto middleincome taxpayers...

Question details

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 $60,000.

                                                                 Standard Multiform     Complex

Billing rate                                                   $60          $135            $260

Average variable costs                               (30) (75)    (150)

Average contribution margin                       $30           $60             $110

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.
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