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An Accounting Firm Charges $2500 for an Audit and $350

Question 87

Multiple Choice

An accounting firm charges $2500 for an audit and $350 for a tax return.Research and available resources have indicated the following constraints. The firm has 900 hours of staff time available each week.
The firm has 155 hours of review time available each week.
Each audit requires 75 hours of staff time and 10 hours of review time.
Each tax return requires 12.5 hours of staff time and 2.5 hours of review time.
What numbers of audits and tax returns will bring in an optimal revenue?


A) The optimal revenue of $0 will occurs when 0 audits and no tax returns are processed.
B) The optimal revenue of $27,200 will occurs when 5 audits and no tax returns are processed.
C) The optimal revenue of $21,700 will occurs when 62 audits and no tax returns are processed.
D) The optimal revenue of $30,000 will occurs when 12 audits and no tax returns are processed.
E) The optimal revenue of $27,200 will occurs when 42 audits and no tax returns are processed.

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