Homework Soursecationcom Your stream on SoundClo Online So Help ter 18 Home
cation.com Your stream on SoundClo Online So Help ter 18 Homework Saved Exercise 18-23 CVP analysis using composite units LO P4 R&R; Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs of three types of tax returns follow. R&R; provides services in the ratio of 4:4:2 (easy, moderate, business). Fixed costs total $14,520 for the tax season. Variable Cost per Return Type of Return Easy (form 1040EZ Hoderate (form 1040) Busine8S Fee Charged s 56 131 281 s 33 78 Book 103 (1) Determine the selling price per composite unit. Ratio Fee Charged Total per composite unit Easy (form 1040EZ) Moderate (form 1040) Print (2) Determine the variable costs per composite unit. 
Solution
(1) Determine the selling price per composite unit. Ratio Fee Charged Total per composite unit Easy (form 1040EZ) 4 $ 56 $ 224 Moderate (form 1040) 4 $ 131 $ 524 Business 2 $ 281 $ 562 $ 1,310 (2) Determine the variable costs per composite unit. Ratio Variable cost per return Total per composite unit Easy (form 1040EZ) 4 $ 33 $ 132 Moderate (form 1040) 4 $ 78 $ 312 Business 2 $ 103 $ 206 $ 650 Contribution margin per composite unit Sales $ 1,310 Less: Variable costs $ 650 Contribution margin $ 660 (3) Determine the break-even point in composite units. Choose Numerator: / Choose Denominator: = Break Even Units Total fixed costs / Contribution margin per unit = Break even units $ 14,520 / $ 660 = 22 composite units (4) Determine the number of units of each product that will be sold at the break-even point. Number per composite unit Number of composite units to break even. Units sales at the break-even point Easy (form 1040EZ) 4 22 88 returns Moderate (form 1040) 4 22 88 returns Business 2 22 44 returns 220 returns