Novak Tax Services provides primarily two lines of service: accounting compilation and tax return preparation. Accounting compilation services represent 60% of its revenue and provide a contribution margin ratio of 30%. Tax return preparation service represent 40% of its revenue and provide a 40% contribution margin ratio. The company's fixed costs are $5,967,000. (a) Calculate the revenue from each type of service that the company must achieve to break even. Accounting Tax Revenue
Novak Tax Services provides primarily two lines of service: accounting compilation and tax return preparation. Accounting compilation services represent 60% of its revenue and provide a contribution margin ratio of 30%. Tax return preparation service represent 40% of its revenue and provide a 40% contribution margin ratio. The company's fixed costs are $5,967,000. (a) Calculate the revenue from each type of service that the company must achieve to break even. Accounting Tax Revenue
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Novak Tax Services provides primarily two lines of service: accounting compilation and tax return preparation. Accounting
compilation services represent 60% of its revenue and provide a contribution margin ratio of 30%. Tax return preparation service
represent 40% of its revenue and provide a 40% contribution margin ratio. The company's fixed costs are $5,967,000.
(a)
Calculate the revenue from each type of service that the company must achieve to break even.
Accounting
Tax
16
Revenue
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