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Annual Income Statement Sales revenue $1,210,000 Costs 715,500 Labor 80,800 Equipment lease 64,800 Rent 51,200 Supplies 112,500 Owner's salary 36,800 0ther costs $1,061,600 Total costs
Annual Income Statement Sales revenue $1,210,000 Costs 715,500 Labor 80,800 Equipment lease 64,800 Rent 51,200 Supplies 112,500 Owner's salary 36,800 0ther costs $1,061,600 Total costs $148,400 Operating profit (loss) If Forman's gets the merchant's business, it will incur an additional $43,000 in labor costs. Will also estimates that he will have to increase equipment leases by about 10 percent, supplies by 15 percent, and other costs by 5 percent. There will be no additional rent Required: a. What are the differential costs that would be incurred as a result of adding this new client? b. Will would normally charge about $63,000 in fees for the services the store would require. How much could he offer to charge and still not
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