Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Current Attempt in Progress Sunland Horticulture provides and maintains live plants in office buildings. The company's 950 customers are charged $40 per month for this

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Current Attempt in Progress Sunland Horticulture provides and maintains live plants in office buildings. The company's 950 customers are charged $40 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 $2,254 each month to maintain its fleet of four service vans and $3,300 each month in salaries. Sunland pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions.Prepare Sunland's contribution format income statement for the month. Per Unit 2s Revenue tA 38,000 iable Expenses arvice Expense $ 18,050 jokkeeping Expense 1900 i al Variable Expenses 19,950 tribution Margin 18,050 ed Expenses ins Expense 2.254Your answer is partially correct. Mr. Sunland 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 $10,389 per year plus $1 per customer per month. Option 2: Hire a part-time bookkeeper for $19,596 per year to handle the invoicing and simple accounting. He would need to pay $6,600 per year to have taxes and year-end financial statements prepared. Compare the current bookkeeping cost with the two options at customer levels of 950, 1,510, and 1,586.Compare the current bookkeeping cost with the two options at customer levels of 950, 1,510, and 1,586. 950 1,510 1,586 Current cost 22,800 36,240 38,064 Option 1 21,798 28,509 29,421 Option 2 26,256 $ 26,256 26,256Mr. Sunland 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 $10,389 per year plus $1 per customer per month. Option 2: Hire a part-time bookkeeper for $19,596 per year to handle the invoicing and simple accounting. He would need to pay $6,600 per year to have taxes and year-end financial statements prepared. Compare the current bookkeeping cost with the two options at customer levels of 950, 1,510, and 1,586. 950 1,510 1,586 Current cost 22,800 $ 36,240 38,064 Option 1 11,400.00 28,509 29,421 Option 2 21,789.00 28,509.00 29,421.00

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

Step: 3

blur-text-image

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

Accounting Principles Volume 2

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

8th Canadian Edition

1119502551, 1-119-50255-5, 978-1119502555

More Books

Students also viewed these Accounting questions

Question

What are the potential traps or limitations of this new technology?

Answered: 1 week ago

Question

Peoples understanding of what is being said

Answered: 1 week ago