A student is proposing a business plan to open a tax preparation business. The proposed business has $ 3,000 per month of fixed expenses (rent, utilities, insurance, manager's salary). The student has estimated the average revenue generated from preparing one tax return is $ 120. The variable costs (paper, labor, electronic filing fee) per return are estimated to be $ 60.
Explain the process to approach and complete a story problem.
How many returns per month would have to be completed in order for this company to break even? What is this referred to as in research?