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Assignment
William Chang, CPA, is a sole proprietor who does corporate, partnership, and individual tax returns. He is constrained by time, which is his only cost. On average, the revenues and time required for different types of tax returns are as follows:
TYPE OF RETURN TIME IN HOURS REVENUE PER TAX RETURN
Corporate 20 $2000
Partnership 10 $1200
Individual 5 $400
William has only 2000 hours that he can work in order to complete the tax returns which can be broken down into the following categories:
Corporate 50 returns
Partnership 30 returns
Individual 200 returns
Given the time in hours necessary to prepare the returns as a constraint, what product mix should William Chang adopt?
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