The managing partner at Mina's Accounting Service typically hires one part-time intern to complete her client's basic tax returns. Mina expects her intern to complete 280 of these basic returns, estimating each one to take 30 minutes of the intern's time. Mina pays her intern $25/hr and incurs additional variable overhead costs of $20/hr associated with the resources that are needed behind the scenes for these jobs. What cost of services should Mina budget for all basic tax returns this season, and how much should she charge each client if she wants to earn a 60% gross margin on each of these returns?
The managing partner at Mina's Accounting Service typically hires one part-time intern to complete her client's basic tax returns. Mina expects her intern to complete 280 of these basic returns, estimating each one to take 30 minutes of the intern's time. Mina pays her intern $25/hr and incurs additional variable overhead costs of $20/hr associated with the resources that are needed behind the scenes for these jobs. What cost of services should Mina budget for all basic tax returns this season, and how much should she charge each client if she wants to earn a 60% gross margin on each of these returns?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The managing partner at Mina's Accounting Service typically hires one part-time intern to complete her client's basic tax returns. Mina expects her intern to complete 280 of these basic returns, estimating each one to take 30 minutes of the intern's time. Mina pays her intern $25/hr and incurs additional variable overhead costs of $20/hr associated with the resources that are needed behind the scenes for these jobs. What cost of services should Mina budget for all basic tax returns this season, and how much should she charge each client if she wants to earn a 60% gross margin on each of these returns?
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