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Oriole Horticulture provides and maintains live plants in office buildings. The company's 938 customers are charged $30 per month for this service, which includes weekly
Oriole Horticulture provides and maintains live plants in office buildings. The company's 938 customers are charged $30 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $17 per month. The company incurs $2,490 each month to maintain its fleet of four service vans and $3,136 each month in salaries. Oriole pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions. (a) Prepare Oriole's contribution format income statement for the month. Per UniteTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer . (b). What is the expected monthly operating income if 250 customers are added? Operating income $Mr. Oriole 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 $10,248 per year plus $1 per customer per month. Option 2: Hire a part-time bookkeeper for $19,388 per year to handle the invoicing and simple accounting. He would need to pay $5,300 per year to have taxes and year-end financial statements prepared. Compare the current bookkeeping cost with the two options at customer levels of 938, 1,120, and 1,200. 938 1,120 1,200 Current cost $ CA Option 1 Option 2 eTextbook and Media
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