This exercise continues the Lawlor Lawn Service, Inc., situation from Exercise 19-32 of Chapter 19. Lawlor Lawn Service currently charges $100 for a standard lawn service and incurs $60 in variable cost. Assume fixed costs are $1,400 per month. Lawlor has been offered a special contract for $80 each for 20 lawns in one subdivision. This special contract will not affect Lawlor’s other business.
Requirements
1. Should Lawlor take the special contract?
2. What will Lawlor’s incremental profit be on the special contract?