What will be the effect on budget tax services profit if it

Reference no: EM13589622

Budget Tax Service, Inc., prepares tax returns for small businesses. The cost of preparing 800 tax returns in the prior year was:

Direct labor	$	330,400
Variable overhead		284,800
Fixed overhead		243,000
Total cost	$	858,200

At the start of the current year, the company received an offer from Advantage Business, a firm that provides bundled services to businesses. Advantage wants Budget Tax Service to prepare tax returns for its 140 small-business clients. Budget Tax Service has the capacity to prepare up to 1,000 returns in a given year, so this special order would not take away revenue from any of Budget Tax Service's current clients. Advantage is willing to pay $940 per tax return.

What will be the effect on Budget Tax Service's profit if it agrees to prepare returns for the 140 clients of Advantage Business?

Profit will ____________ (increase or decrease) by $____________ per year.

Reference no: EM13589622

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