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please see below Pharoah Horticulture provides and maintains live plants in office buildings. The company's 892 customers are charged $32 per month for this service,
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Pharoah Horticulture provides and maintains live plants in office buildings. The company's 892 customers are charged $32 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 $2,018 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. What is the expected monthly operating income if 156 customers are added? Operating income $ Attempts: 0 of 3 used (c) Mr. Pharoah is exploring options to Teduce 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 Step by Step Solution
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