Answer and Explanation:
1. The computation of the total annual cost in each case is shown below:
Total annual cost = Annual fee + license per tax return × number of returns filed
a. For 332 returns
= $403 + $11 × $332
= $403 + $3,652
= $4,055
b. For 424 returns
= $403 + $11 × $424
= $403 + $4,664
= $5,067
c. For 522 returns
= $403 + $11 × $522
= $403 + $5,742
= $6,145
2. Now the cost per return is
Cost per return = Total annual cost ÷ number of returns filed
a. For 332 returns
= $4,055 ÷ 332 retunrs
= $12.21
b. For 424 returns
= $5,067 ÷ 424 returns
= $11.95
c. . For 522 returns
= $6,145 ÷ 522 returns
= $11.77
