Question B and C

Sunland Horticulture provides and maintains live plants in office buildings. The company's 884 customers are charged $37 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 $2.194 each month to maintain its fleet of four service vans and $3.004 each month in salaries. Sunland paysa bookkeeping service $2 per customer each month to handle all invoicing and accounting functions. (b) What is the expected monthly operating income if 174 customers are added? Operating income $ (c) Mr. Sunland 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 $10,497 per year plus $1 per customer per month Option 2: Hire a part-time bookkeeper for $18.496 per year to handle the invoicing and simple accounting. He would need to pay $5.000 per year to have taxes and year-end financial statements prepared Compare the current bookkeeping cost with the two options at customer levels of 884, 1,597, and 1,638 884 1,597 1,638 $ $ $ Current cost $ $ s Option 1 $ $ $ Option 2