Question
Olfert Green Lawn Care provides a lawn maintenance package at a price of $269.75. For each customer who signs a contract, Olfert will provide weeding,
Olfert Green Lawn Care provides a lawn maintenance package at a price of $269.75. For each customer who signs a contract, Olfert will provide weeding, mowing, and general lawn care once a week for a 10-week period over the summer. The average variable cost for a contract is $123.50. They signed 156 contracts last year and expect to have the samenumber this year. The company wants to retire their old, worn-out lawn equipment and buy all new equipment and tools. (4 marks) (a) What is the most Olfert can spend on lawn equipment and other fixed costs to break even? (b) What is the most Olfert can spend on lawn equipment and other fixed costs in order to make a $12,500 profit from the lawn maintenance contracts?
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