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

Total cost for 316 returns $3,962

Total cost for 408 returns $4,974

Total cost for 524 returns $6,250

Step-by-step 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