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Crane Horticulture provides and maintains live plants in office buildings. The company's 888 customers are charged $31 per month for this service, which includes weekly

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Crane Horticulture provides and maintains live plants in office buildings. The company's 888 customers are charged $31 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $19 per month. The company incurs \$2,012 each month to maintain its fleet of four service vans and \$3,330 each month in salaries. Crane pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions. Mr. Crane 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 $10,473 per year plus $1 per customer per month. Option 2: Hire a part-time bookkeeper for $19,402 per year to handle the invoicing and simple accounting. He would need to pay $6,500 per year to have taxes and year-end financial statements prepared. Compare the current bookkeeping cost with the two options at customer levels of 888,1,020, and 1,210

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