Question
Pharoah Horticulture provides and maintains live plants in office buildings. The companys 916 customers are charged $32 per month for this service, which includes weekly
Pharoah Horticulture provides and maintains live plants in office buildings. The companys 916 customers are charged $32 per month for this service, which includes weekly watering visits. The variable cost to service a customers location is $19 per month. The company incurs $2,490 each month to maintain its fleet of four service vans and $3,392 each month in salaries. Pharoah pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions.
What is the expected monthly operating income if 190 customers are added?
Per Unit les Revenue $ 29312 $ 32 riable Expenses ervice Expense $ 17404 i 19 i ookkeeping Expense 1832 2 i tal Variable Expenses 19236 i 21 i ontribution Margin 10076 11 ved Expenses alaries Expense 3392 i ans Expense 2490 i tal Fixed Expenses 5882 i perating Income $ 4194Step by Step Solution
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