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Author Question: Gabbard and Fink CPA firm leases tax software from BGG Tax Software Company to prepare federal and ... (Read 59 times)

effaey

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Gabbard and Fink CPA firm leases tax software from BGG Tax Software Company to prepare federal and state income tax returns. The lease agreement calls for a base charge of $5,000 per year plus $100 per year for each state for which returns are prepared. In addition, Gabbard and Fink are charged $2 ($1 for federal and $1 for state) for each tax return prepared. All of their clients have federal and state returns prepared, with 60 percent in Arkansas and 40 percent in Oklahoma.

Required:

a.What is the firm's total annual cost for the software if a total 2,500 returns are
prepared?
b.What is the firm's cost per unit at a level of 2,500 returns?
c.What is the firm's cost per return if 2,000 are prepared?
d.Besides software lease cost, list five other costs that Gabbard and Fink must consider
when the company set the selling price to be charged to the clients.


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Marked as best answer by effaey on Feb 5, 2023

swagmaster69

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effaey

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Reply 2 on: Feb 5, 2023
Thanks for the timely response, appreciate it


alexanderhamilton

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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