Question

Will Jones, Pharoah is a small CPA firm that focuses primarily on preparing tax returns for small businesses. The company pays a $486 annual fee plus $11 per tax return for a license to use Mega Tax software.
(a) What is the company’s total annual cost for the Mega Tax software:
i. if 316 returns are filed?
ii. If 408 returns are filed?
iii. If 524 returns are filed?
Total cost for 316 returns $ ______
Total cost for 408 returns $ _______
Total cost for 524 returns $ _______

Answer 1

Answer:

Total cost for 316 returns $3,962

Total cost for 408 returns $4,974

Total cost for 524 returns $6,250

Explanation:

The total cost incurred by Pharoah with the Mega Tax software is given by the fixed cost of $486, referring to the annual fees, added to the cost per tax return of $11 multiplied by the volume of returns filed (n):

$C= \ 486+(\ 11*n)$

i. if 316 returns are filed?  (n = 316)

$C= \ 486+(\ 11*316)\\C=\ 3,962$

ii. If 408 returns are filed?  (n = 408)

$C= \ 486+(\ 11*408)\\C=\ 4,974$

iii. If 524 returns are filed? (n = 524)

$C= \ 486+(\ 11*524)\\C=\ 6,250$

Total cost for 316 returns $3,962

Total cost for 408 returns $4,974

Total cost for 524 returns $6,250