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Flaherty Accounting services pays Php 2,000 per month for a tax preparation software license. In addition, variable charges incurred average Php9 for every tax return the firm prepares.
Problem a. Determine the total cost and the cost per unit if the firm expects to prepare the following number of tax returns in March 2013:
i. 200ii. 500iii. 800
Problem b. Why does the cost per unit change in (i), (ii), (iii) of letter a?
Problem c. The owner of Flaherty Accounting services wants to earn a margin (excluding any direct cost) on tax returns of Php15,000 during March. If 200 returns are prepared, what tax return preparation fee should be charged? If that fee is charged and 800 returns are prepared, what is the margin in March?
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