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PDF Advisory and Tax Services provides primarily two lines of service: Advisory and Tax. Advisory services represent 0.60 of its revenue and provide a contribution margin ratio of 0.30 Tax services represent 0.40 of its revenue and provide a 0.40 contribution margin ratio. The company’s fixed costs are $4,250,000. Required Compute the weighted average contribution margin ratio. Compute the total revenue required to break even. Calculate the revenue from each type of service that the company must achieve to break even

PDF Advisory and Tax Services provides primarily two lines of service: Advisory and Tax. Advisory services represent 0.60 of its revenue and provide a contribution margin ratio of 0.30 Tax services represent 0.40 of its revenue and provide a 0.40 contribution margin ratio. The company’s fixed costs are $4,250,000. Required Compute the weighted average contribution margin ratio. Compute the total revenue required to break even. Calculate the revenue from each type of service that the company must achieve to break even

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PDF Advisory and Tax Services provides primarily two lines of service: Advisory and Tax.

 

Advisory services represent 0.60 of its revenue and provide a contribution margin ratio of 0.30

Tax services represent 0.40 of its revenue and provide a 0.40 contribution margin ratio.

The company’s fixed costs are $4,250,000.

Required

  1. Compute the weighted average contribution margin ratio.
  2. Compute the total revenue required to break even.
  3. Calculate the revenue from each type of service that the company must achieve to break even. 
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