10 Tom's Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has approached Tom about doing his taxes but is concerned about the fees Tom normally charges. The costs and revenues at Tom's Tax Services follow 02:52:00 TON'S TAX SERVICES Annual Income Statement Sales revenue $724,000 Costs Labor 465,000 Equipment lease 48,900 Rent 43,000 Supplies 31,400 Ton's salary 73,300 Other costs 22.800 Total costs $ 684,400 Operating profit (los) 339.500 Tom gets the store's business, he will incur an additional $59,800 in labor costs. Tom also estimates that he will have to increase equipment leases by about 5 percent, supplies by 5 percent, and other costs by 5 percent Required: a. What are the differential costs that would be incurred as a result of adding this new client? b. Tom would normally charge about $73,800 in fees for the services the store would require. How much could he offer to charge and still not lose money on this client? c. What considerations, other than costs, are necessary before making this decision? a. What are the differential costs that would be incurred as a result of adding this new client? b. Tom would normally charge about $73,800 in fees for the services the store would require. How much could he offer to charge and still not lose money on this client? c. What considerations, other than costs, are necessary before making this decision? Complete this question by entering your answers in the tabs below. Required A Required B Required What are the differential costs that would be incurred as a result of adding this new client? Total costs Required B > Complete this question by entering your answers in the tabs below. Required a Required B Required C Tom would normally charge about $73,800 in fees for the services the store would require. How much could he offer to charge and still not lose money on this client? Reduce the fees by Complete this question by entering your answers in the tabs below. Required A Required B Required What considerations, other than costs, are necessary before making this decision? (Select all that apply.) Whether this will lead to demands by other clients for lower tees. What other opportunities the company has for its tax professionals. Whether the business is likely to expand in the future. Profitability of the other contracts Current financial position of the company