Question
Danny Spo works full-time for Lowe's and runs a lawn-mowing service part-time after work during the warm months of April through October. Danny has two
Danny Spo works full-time for Lowe's and runs a lawn-mowing service part-time after work during the warm months of April through October. Danny has two men working with him, each of whom is paid $6.00 per lawn mowing. Danny has 31 residential customers who contract with him for once-weekly lawn mowing during the months of May through September, and twice-per-month mowing during April and October. On average, Danny charges $42 per lawn mowed. Recently, Sunstone Management Services asked Danny to mow the lawn at each of its 30 rental properties every two weeks during the months of May through September. Sunstone has offered to pay $30 per lawn mowing and would forego the lawn edging that normally takes Dannys team about half of its regular mowing time. If Danny accepts the job, he can assign a one-man team to mow the rental house yards and will have to buy an additional power lawn mower for about $335 used. Fuel to run the additional mower will be about $0.40 per yard.
1. If Danny accepts the special order, by how much will his income increase or decrease?
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