Grixdale Tax Services prepares taxes for individuals. Grixdale offers a simplified pricing model with two alternatives for taxpayers: Standard Deduction (Standard) or Itemized Deductions (Itemized). Price and variable costs for the two services are listed below. Sales price (per return) Variable costs (per return) Standard $ 190.00 150.00 The annual fixed costs at Grixdale are $507,500. Based on experience, the owner estimates that Standard Deduction returns represent 25 percent of the the firm's business. Itemized $530.00 310.00 Required: How many Standard Deduction and Itemized Deduction returns must be filed annually to break even? Standard Deduction returns Itemized Deduction returns Answer is complete but not entirely correct. Break-Even Sales in Units 12,688 X 2,302 X
Grixdale Tax Services prepares taxes for individuals. Grixdale offers a simplified pricing model with two alternatives for taxpayers: Standard Deduction (Standard) or Itemized Deductions (Itemized). Price and variable costs for the two services are listed below. Sales price (per return) Variable costs (per return) Standard $ 190.00 150.00 The annual fixed costs at Grixdale are $507,500. Based on experience, the owner estimates that Standard Deduction returns represent 25 percent of the the firm's business. Itemized $530.00 310.00 Required: How many Standard Deduction and Itemized Deduction returns must be filed annually to break even? Standard Deduction returns Itemized Deduction returns Answer is complete but not entirely correct. Break-Even Sales in Units 12,688 X 2,302 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Grixdale Tax Services prepares taxes for individuals. Grixdale offers a simplified pricing model with two alternatives for taxpayers:
Standard Deduction (Standard) or Itemized Deductions (Itemized). Price and variable costs for the two services are listed below.
Sales price (per return)
Variable costs (per return)
Standard
$ 190.00
150.00
The annual fixed costs at Grixdale are $507,500. Based on experience, the owner estimates that Standard Deduction returns
represent 25 percent of the the firm's business.
Required:
How many Standard Deduction and Itemized Deduction returns must be filed annually to break even?
Answer is complete but not entirely correct.
Standard Deduction returns
Itemized Deduction returns
Break-Even
Sales in
Units
Itemized
$ 530.00
310.00
12,688
2,302 X
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