Pharoah Horticulture provides and maintains live plants in office buildings. The companys 892 customers are charged $ 32 per month for this service, which includes weekly watering visits. The variable cost to service a customers location is $ 17 per month. The company incurs $ 2,018 each month to maintain its fleet of four service vans and $ 3,318 each month in salaries. Pharoah pays a bookkeeping service $ 2 per customer each month to handle all invoicing and accounting functions.

Prepare Pharoahs contribution format income statement for the month.

select an income statement item: Fixed ExpensesSales RevenueOperating IncomeVans ExpenseBookkeeping ExpenseVariable ExpensesSalaries ExpenseTotal Fixed ExpensesService ExpenseTotal Variable ExpensesContribution Margin
						Per Unit
				$ enter a dollar amount		$ enter a dollar amount
		$ enter a dollar amount				enter a dollar amount
		enter a dollar amount				enter a dollar amount
				enter a total amount for section one		enter a total amount per unit for section one
				enter a total amount for the first part		$ enter a total amount per unit for the first part
		enter a dollar amount
		enter a dollar amount
				enter a total amount for section two
				$ enter a total amount for this statement

What is the expected monthly operating income if 156 customers are added?

Operating income

$ enter the operating income amount in dollars

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 $ 10,482 per year plus $ 1 per customer per month.
Option 2:	Hire a part-time bookkeeper for $ 18,648 per year to handle the invoicing and simple accounting. He would need to pay $ 6,300 per year to have taxes and year-end financial statements prepared.

Compare the current bookkeeping cost with the two options at customer levels of 892, 1,210, and 1,282.

		892	1,210	1,282
Current cost		$ enter a dollar amount	$ enter a dollar amount	$ enter a dollar amount
Option 1		$ enter a dollar amount	$ enter a dollar amount	$ enter a dollar amount
Option 2		$ enter a dollar amount	$ enter a dollar amount	$ enter a dollar amount