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Blossom Horticulture provides and maintains live plants in office buildings. The company's 870 customers are charged $37 per month for this service, which includes weekly
Blossom Horticulture provides and maintains live plants in office buildings. The company's 870 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 $2,206 each month to maintain its fleet of four service vans and $3,286 each month in salaries. Blossom pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions. (a) Prepare Blossom's contribution format income statement for the month. eTextbook and Medla $ $ $ $ Per Unit (b) What is the expected monthly operating income if 206 customers are added? Operating income $ (c) eTextbook and Medla Save for Later Attempts: 0 of 3 used Submit Answer Mr. Blossom 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 $10,290 per year plus $1 per customer per month. Option 2: Hire a part-time bookkeeper for $19,976 per year to handle the invoicing and simple accounting. He would need to pay $5,600 per year to have taxes and year-end financial statements prepared. Compare the current bookkeeping cost with the two options at customer levels of 870, 1,839, and 1,918. 870 1,839 $ $ Current cost $ Option 1 $ $ $ $ $ Option 2 eTextbook and Media Save for Later 1918 Attempts: 0 of 3 used Submit
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