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please answer c for thumbs up Sunland Horticulture provides and maintains live plants in office buildings. The company's 930 customers are charged $46 per month
please answer c for thumbs up
Sunland Horticulture provides and maintains live plants in office buildings. The company's 930 customers are charged $46 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $26 per month. The company incurs $2,800 each month to maintain its fleet of four service vans and $3,800 each month in salaries. Sunland pays a bookkeeping service $5 per customer each month to handle all invoicing and accounting functions. Per Unit Sales Revenue $ 42780 Variable Expenses Service Expense 24180 i 26 Bookkeeping Expense 4650 i 5 Total Variable Expenses -28830 -31 Contribution Margin 13950 $ $1 Fixed Expenses Vans Expense 2800 i Salaries Expense 3800 Total Fixed Expenses -6600 i Operating Income 7350 (c) Mr. Sunland is exploring options to reduce the annual bookkeeping costs. 1: Option Renegotiate the current contract with the bookkeeping service to pay a flat fee of $11,000 per year plus $4 per customer per month Option Hire a part-time bookkeeper for $18,800 per year to handle the invoicing and simple accounting, Sunland will need to pay $5.800 per year to have taxes and year-end financial statements prepared. 2: Compare the current bookkeeping cost with the two options at customer levels of 930, 1.800, and 1,900. 930 1,800 1,900 $ $ Current cost $ $ $ Option 1 $ $ Option 2 Step by Step Solution
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