Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax...

Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax returns have the following characteristics:

	Individuals		Partnerships		Corporations
Price charged per tax return	$	250	$	1,000	$	2,200
Variable cost per tax return (including wage paid to tax preparer)	$	200	$	900	$	2,010
Expected tax returns prepared per year		51,000		17,000		17,000

The total fixed costs per year for the company are $853,600.

Required:

a. What is the anticipated level of profits for the expected sales volumes?

b. Assuming that the product mix is the same at the break-even point, compute the break-even point.

c. Suppose the product sales mix changes so that, for every ten tax returns prepared, six are for individuals, one is for a partnership, and three are for corporations. Now what is the break-even volume for Sell Block?

Expert Solution

ekkarill92 answered 2 years ago

Sell block prepares three types of simple tax returns: individual, partnerships, and small corporations. The tax...

Sell block prepares three types of simple tax returns: individual, partnerships, and small corporations. The tax returns have the following characteristics: Price charged per tax return: Individuals: $200 Partnerships: $1000 Corporations: $2000 Variable cost per tax return (including wage paid to tax preparer): Individuals: $180 Partnerships: $900 Corporations: $1,800 Expected tax returns prepared per year: Individuals: 60,000 Partnerships: 4,000 Corporations: 16,000 The total fixed costs per year for the company are $3,690,000 A. What is the expected profit? B. What...

Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax...

Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax returns have the following characteristics: Individuals Partnerships Corporations Price charged per tax return $ 160 $ 850 $ 1,750 Variable cost per tax return (including wage paid to tax preparer) $ 105 $ 750 $ 1,590 Expected tax returns prepared per year 56,000 7,000 7,000 The total fixed costs per year for the company are $910,000. Required: a. What is the anticipated level of...

Ariel Tax Services prepares tax returns for individual and corporate clients. As the company has gradually...

Ariel Tax Services prepares tax returns for individual and corporate clients. As the company has gradually expanded to 10 offices, the founder, Max Jacobs, has begun to feel as though he is losing control of operations. In response to this concern, he has decided to implement a performance measurement system that will help control current operations and facilitate his plans of expanding to 20 offices. Jacobs describes the keys to the success of his business as follows: “Our only real...

The XYZ Tax Return Firm prepares tax returns for individual, partnership, and corporate clients. It competes...

The XYZ Tax Return Firm prepares tax returns for individual, partnership, and corporate clients. It competes and plans to grow by preparing returns faster than other firms and to charge its clients lower fees than competitors charge. There are many other tax preparation firms in the industry capable of preparing tax returns for its target market. XYZ believes it needs to have satisfied employees who have earned their CPA or Enrolled Agent (EA) license are critical to its long-term success....

1- Partnerships and proprietorships generally have a tax advantage over corporations.

Q1- Multiple choice Question and True and False: 1- Partnerships and proprietorships generally have a tax advantage over corporations. a. True b. False 2- If the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series. a. True b. False 3- The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to a. Maximize its expected total corporate income. b. Maximize its expected EPS. c. Minimize the chances of losses. d. Maximize the...

Identify the similarities and differences in the tax liability of corporations, individuals, partnerships, and own business...

Identify the similarities and differences in the tax liability of corporations, individuals, partnerships, and own business owners.

Compare and contrast the tax rules and treatment applicable to corporations and partnerships. Indicate the major...

Compare and contrast the tax rules and treatment applicable to corporations and partnerships. Indicate the major way in which the tax treatment affects the shareholders or partners. Explain at least two (2) reasons why a business owner might opt to become a partnership over a corporation. Provide support for your rationale. Imagine that you are a consultant and make the recommendation that the most advantageous business structure is a C-corporation. Justify why you would recommend a Corporation over a Partnership....

Suppose that there are just three types of investors with the following tax rates: Individuals Corporations...

Suppose that there are just three types of investors with the following tax rates: Individuals Corporations Institutions Dividends 35% 20% 0% Capital gains 18 8 0 Individuals invest a total of $81.5 billion in stock and corporations invest $11.80 billion. The remaining stock is held by the institutions. All three groups simply seek to maximize their after-tax income. These investors can choose from three types of stock offering the following pretax payouts per share: Low Payout Medium Payout High Payout...

This week we are focusing on tax implications for three types of business entities: corporations, S...

This week we are focusing on tax implications for three types of business entities: corporations, S corporations, partnerships, and LLCs. In your initial post address the following: List and explain the pros and cons, from a taxation sense, of operating each type of business. Explain the importance of the passive activity loss rules. Why do you think these rules were put into law?

There are three major forms of business organizations in the United States; proprietorships, partnerships and corporations....

There are three major forms of business organizations in the United States; proprietorships, partnerships and corporations. Describe the advantages and disadvantages of each form.

Question

Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax...

Solutions

Expert Solution

Related Solutions

Sell block prepares three types of simple tax returns: individual, partnerships, and small corporations. The tax...

Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations. The tax...

Ariel Tax Services prepares tax returns for individual and corporate clients. As the company has gradually...

The XYZ Tax Return Firm prepares tax returns for individual, partnership, and corporate clients. It competes...

1- Partnerships and proprietorships generally have a tax advantage over corporations.

Identify the similarities and differences in the tax liability of corporations, individuals, partnerships, and own business...

Compare and contrast the tax rules and treatment applicable to corporations and partnerships. Indicate the major...

Suppose that there are just three types of investors with the following tax rates: Individuals Corporations...

This week we are focusing on tax implications for three types of business entities: corporations, S...

There are three major forms of business organizations in the United States; proprietorships, partnerships and corporations....