Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After spilling his plate of spaghetti all over his friend's apartment floor, Paul rented a carpet cleaner to clean it up . In doing so

After spilling his plate of spaghetti all over his friend's apartment floor, Paul rented a carpet cleaner to clean it up. In doing so, he realized just how easy it is to clean carpets! He started his own business, diving in head-first by purchasing a carpet cleaner, to make a little money. His friends are keen to use his services to clean their rented apartments before handing back keys to the landlords. Paul charges $50 to clean the main areas of an apartment. In addition to his equipment costs, he uses a cleaning solution on the carpet, which costs about $8 per unit cleaned. Because of his class load, Paul currently cleans just 4 apartments per month, but he is thinking about asking his roommate to join him so that he can increase the volume of sales. Gary's friends catch word that he's thinking about raising his prices. As a result, he recognizes that his services may not be as attractive as they have been, so he plans for a decrease in sales volume by one apartment per month, given the higher selling price. How does this combination affect his DOL, if at all?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting

Authors: Heintz and Parry

20th Edition

1285892070, 538489669, 9781111790301, 978-1285892078, 9780538489669, 1111790302, 978-0538745192

More Books

Students also viewed these Accounting questions