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Calculate the revenue from each type of service

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Question: Account-Able Company provides primarily two lines of service: accounting and tax. Accounting-related services represent 60% of its revenue and provide a contribution margin ratio of 30%. Tax services represent 40% of its revenue and provide a 45% contribution margin ratio. The company's fixed costs are $9,000,000.

Instructions: (a)? Calculate the revenue from each type of service that the company must achieve to break even.

(b)? The company has a desired net income of $1,800,000. What amount of revenue would Account-Able earn from tax services if it achieves this goal with the current sales mix?

Reference no: EM132753549

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