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. (a) 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?

Answer 1

Answer:$3,500, $4, 500 $5,500=$13,500

Explanation:

A) Given that annual fee is $500 and %tax return=10%

we have that

Mega Tax software when 300 returns are filed

we have Annual fees=$500.00

Variable fees (300 x 10)=3,000.00

 Costof return=  $ 3,500.00

Mega Tax software when  400 returns are filed

we have Annual fees= $500.00

Variable fees (400 x 10)= 4,000.00

Cost of return= $4,500.00

Mega Tax software when 500 returns are filed

we have our Annual fees=$500

Variable fees (500 x 10)= 5,000.00

Cost of return=$5,500.00

Total cost of return for Mega Tax software = 3,500+4500+5,500=$13,500