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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.
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
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 they set the price they will charge their clients.
Physical Distribution
The activities involved in moving a product from the manufacturer to the customer, including warehousing, material handling, transportation, and order fulfillment.
Order Cycle
The complete process from when an order is placed by a customer to the delivery of the product or service, including all operational steps in between.
Order Transmission
The process through which an order's details are sent from one party to another, typically involving electronic methods to ensure speed and accuracy.
Order Receipt
The initial step in the order management process where a company formally acknowledges the receipt of a customer's order.
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