Question:
Will Jones, LLP is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $500 annual fee plus $10 per tax return for a license to use Mega Tax software.
Required
1. What is the company"s total annual cost for the Mega Tax software if 300 returns are filed? If 400 returns are filed? If 500 returns are filed?
2. What is the company"s cost per return for the Mega Tax software if 300 returns are filed? If 400 returns are filed? If 500 returns are filed?
3. Why does the cost per return differ at each of the three volume levels?