Forman's Services is a small accounting firm that offers payroll and bookkeeping services to small businesses and individuals. A loc merchant has approached Will Forman, the owner, about taking over his payroll disbursements, but is concerned about the fees Forman's normally charges. The costs and revenues at Forman's Services follow. If Forman's gets the merchant's business, it will incur an additional $31,000 in labor costs. Will also estimates that he will have to increase equipment leases by about 10 percent, supplies by 15 percent, and other costs by 5 percent. There will be no additional Required: a. What are the differential costs that would be incurred as a result of adding this new client? b. Will would normally charge about $51,000 in fees for the services the store would require. How much could he offer to charge still not lose money on this client? What considerations, other than costs, are necessary before making this decision? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. ?. Whether this will lead to demands by other clients for lower fees. What other opportunities the company has for its payroll professionals. Profitability of the other contracts. Whether the business is likely to expand in the future. Current financial position of the company. Complete this question by entering your answers in the tabs below. Will would normally charge about $51,000.00 in fees for the services the store would require. How much could he offer to charge and still not lose money on this client? c. What considerations, other than costs, are necessary before making this decision? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. 2 Whether this will lead to demands by other clients for lower fees. What other opportunites the company has for its payroll professionals. Profitabiity of the other contracts. 2 Whether the business is likely to expand in the future. Current financia! position of the company. Complete this question by entering your answers in the tabs below. What are the differential costs that would be incurred as a result of adding this new client
