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Pool Cleaning Service provides pool cleaning services to residential customers. The company has three employees, each assigned to specific customers. The company considers each employee's
Pool Cleaning Service provides pool cleaning services to residential customers. The company has three employees, each assigned to specific customers. The company considers each employee's territory as a business segment. The company incurs variable costs that include the employees' wages, pool chemicals, and gas for the service vans. Fixed costs include depreciation on the service vans. Following is the income statement for the month of July:
Possible reasons for the profitability of this business segment include the following:
Felicity Pool Cleaning Service Income Statement For the Month Ended July 31, 2018 Blue Morrissey $ 8,000 $ 2,400 $ 3,200 1.440 Service Revenue Filip 4,000 $ 1,200 Total 14,400 5,840 Variable Costs Contribution Margin Fixed Costs 4,800 960 2,800 8,560 4,000 4,560 Operating Income Requirement 1. Calculate the contribution margin ratio for each business segment. = Contribution margin ratio Byson Morrissey Freezy Choose from any list or enter any number in the input fields and then click Check Answer. Requirement 2. The business segments had the following numbers of customers: Byson, 50, Morrissey, 80, and Freezy, 100. Compute the service revenue per customer, variable cost per customer, and contribution margin per customer for each business segment. Service revenue per customer Variable costs per customer Contribution margin per customer Byson Morrissey Enter any number in the edit fields and then click Check Answer. Requirement 3. Which business segment was most profitable? List some possible reasons why this segment was most profitable. How might the various reasons affect the company in the long term? The business segment was the most profitable because theStep by Step Solution
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