Sunland Horticulture provides and maintains live plants in office buildings. The company's 884 customers are charged $37 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $17per month. The company incurs $2,194 each month to maintain its fleet of four service vans and $3.004 each month in salaries. Sunland pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functionsA.) picture one B.) What is the expected monthly operating income if 174 customers are added?Operating income $________C.) second picture BPrepare Sunland's contribution format income statement for the month.<>>$$|$Per Unit (c)Mr. Sunland is exploring options to reduce the annual bookkeeping costs.Option 1:Renegotiate the current contract with the bookkeeping service to pay a flat fee of $10,497 per year plus $1 per customer per month.Option 2:Hire a part-time bookkeeper for $18,496 per year to handle the invoicing and simple accounting. He would need to pay $5,000 per year to have taxes and year-end financial statementsprepared.Compare the current bookkeeping cost with the two options at customer levels of 884, 1,597, and 1,638.Current costOption 1Option 2$$$884$$1,597$1,638

Contribution is the excess revenue after absorption of variable cost. After deducting fixed cost…

Sunland Horticulture provides and maintains live plants in office buildings. The company's 884 customers are charged $37 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $17 per month. The company incurs $2,194 each month to maintain its fleet of four service vans and $3.004 each month in salaries. Sunland pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions A.) picture one B.) What is the expected monthly operating income if 174 customers are added? Operating income $________ C.) second picture

Sunland Horticulture provides and maintains live plants in office buildings. The company's 884 customers are charged $37 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $17 per month. The company incurs $2,194 each month to maintain its fleet of four service vans and $3.004 each month in salaries. Sunland pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions A.) picture one B.) What is the expected monthly operating income if 174 customers are added? Operating income $________ C.) second picture

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter4: Job Order Costing

Section: Chapter Questions

Problem 3EA: Burnham Industries incurs these costs for the month: A. What Is the prime cost? B. What is the...

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