Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need help with last part for C. Sales Revenue $ 36,024 Variable Expenses Service Expense $ 16,116 Bookkeeping Expense 1,896 Total Variable Expenses 18,012 Contribution

Need help with last part for C.
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Sales Revenue $ 36,024 Variable Expenses Service Expense $ 16,116 Bookkeeping Expense 1,896 Total Variable Expenses 18,012 Contribution Margin 2.226 Vans Expense Me Total Fixed Expenses 5,682 Continuinrome 12:30 Per Unit evenue $ 36,024 $ 38 e Expenses e Expense 16,116 i 17 ceeping Expense 1.896 MA 2 ariable Expenses 18,012 19 w ution Margin 18,012 $ 19 xpenses es Expense 3,456 Expense 2226 Sed Expenses 5682 (b) Your answer is correct. What is the expected monthly operating income if 248 customers are added? Operating income $ 17,042 (c) Mr. Pharoah 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 $10,275 per year plus $1 per customer per month Option 2: Hire a part-time bookkeeper for $18.460 per year to handle the invoicing and simple accounting. He would need to pay $6,700 per year to have taxes and year-end financial statements prepared. Compare the current bookkeeping cost with the two options at customer levels of 948, 1,377 and 1,460. 948 1,377 1,460 Current cost 22,752 $ 33.048 S Option 1 21,651 $ 26.799 $ Option 2 25.160 $ 25.160 S

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_2

Step: 3

blur-text-image_3

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

Intermediate Accounting Volume 1

Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel

8th Edition

1260881237, 9781260881233

More Books

Students also viewed these Accounting questions

Question

For any random variable X, we have Var(X) E(X).

Answered: 1 week ago