Emco Rental Management provides service to clients who wish to rent out their properties to summer vacationers. Emco provides three basic services: Website management, Basic rental contract management, and Cleaning and inspection.

Emco charges its clients a flat 20% of their earned rents and evaluates profitability for each of their 55 clients against an average share of Emco's total annual costs. But Elinor Mae, the owner and general manager, wants to get better idea of customer profitability, so she has decided to put together a simple ABC cost analysis.

Elinor's assessment of Website management is that its costs are simply driven by the number of clients she has. This contrasts with Basic rental contract management, which is driven by the number of rental contracts, 350 last summer. Cleaning and inspection is done after each rented week. There were 550 rented weeks last summer.

Based on Elinor's estimates, the total cost for each of the three activities last year was $99,550 for Website management, $100,800 for Basic rental contract management, and $39,875 for Cleaning and inspection.

Merle Lynch, one of Emco's customers, had 2 contracts last summer, each for 4 weeks. Based on Elinor's ABC estimates, what was the difference in cost between her original cost estimate for the services used by Mr. Lynch last year and the ABC estimate?

A.The ABC cost estimatesaves Emco over $1,000

B.The ABC cost estimate is higher by over $1,000

C.None of the other three answers is correct

D.The ABC cost estimate is lower by more than $2,000