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R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs for three types of tax returns follow. Fixed costs total $18,000. Type of Return Easy Moderate Business Sales Mix Fee Charged $ 50 125 275 Easy Moderate 50% 30% 20% (1) Determine the weighted average contribution margin Sales mix Variable Cost per Return 50% 30% $.30 75 100 Contribution margin per retuan Total per unt

R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs for three types of tax returns follow. Fixed costs total $18,000. Type of Return Easy Moderate Business Sales Mix Fee Charged $ 50 125 275 Easy Moderate 50% 30% 20% (1) Determine the weighted average contribution margin Sales mix Variable Cost per Return 50% 30% $.30 75 100 Contribution margin per retuan Total per unt

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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R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs for three types of tax returns follow. Fixed costs total $18,000. Type of Return Easy Moderate Business Easy Moderate Business Sales Mix Fee Charged $ 50 125 275 50% 30% 20% (1) Determine the weighted average contribution margin. Sales mix Easy Moderate Business Variable Cost per Return $ 30 75 100 50% 30% 20% Contribution margin per return Weighted average contribution margin (2) Determine the break-even point in units using the weighted-average contribution margin. Numerator: 1 Denominator 7 (3) Determine the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even Total per unit Break Even Units Break even unsts Units sales at the break-even point
Transcribed Image Text:R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs for three types of tax returns follow. Fixed costs total $18,000. Type of Return Easy Moderate Business Easy Moderate Business Sales Mix Fee Charged $ 50 125 275 50% 30% 20% (1) Determine the weighted average contribution margin. Sales mix Easy Moderate Business Variable Cost per Return $ 30 75 100 50% 30% 20% Contribution margin per return Weighted average contribution margin (2) Determine the break-even point in units using the weighted-average contribution margin. Numerator: 1 Denominator 7 (3) Determine the number of units of each product that will be sold at the break-even point. Sales mix Number of units to break even Total per unit Break Even Units Break even unsts Units sales at the break-even point
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