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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
16. LO.2 (Cost behavior) Flaherty Accounting Services pays $2,000 per month for a tax software license. In addition, variable charges incurred average $9 for every tax return the firm prepares.
a. Determine the total cost and the cost per unit if the firm expects to prepare the fol- lowing number of tax returns in March 2010:
1. 200
2. 500
3. 800
b. Why does the cost per unit change in (1), (2), and (3) of part (a)?
c. The owner of Flaherty Accounting Services wants to earn a margin (excluding any other direct costs) on tax returns of $15,000 during March. If 200 returns are pre- pared, what tax return preparation fee should be charged? If that fee is charged and 800 returns are prepared, what is the margin in March?
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