Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sterling Auto Detail is currently open Monday through Friday. In the past year, income before taxes was as follows: Numbers of cars detailed 2,080 Revenue
Sterling Auto Detail is currently open Monday through Friday. In the past year, income before taxes was as follows:
Numbers of cars detailed | 2,080 | |||
---|---|---|---|---|
Revenue | $468,000 | |||
Less operating expenses: | ||||
Supplies (polish, wax, etc.) | $5,824 | |||
Salaries of detailers | 104,000 | |||
Water and other variable costs | 12,480 | |||
Supervisor's salary | 65,000 | |||
Rent | 36,000 | |||
Depreciation | 5,000 | |||
Other fixed costs | 1,050 | 229,354 | ||
Income before taxes | $238,646 |
Quincy Davis, the owner of Sterling, is considering extending the workweek through Saturday. If he takes this action, he'll hire a part-time employee for $300 per day to act as the Saturday manager so the supervisor still can have Saturday off. Quincy estimates that his company will detail an additional 10 cars per Saturday, 52 weeks per year.
(a)
Calculate the annual incremental revenue associated with being open on Saturday.
Annual incremental revenue | $enter a annual incremental revenue in dollar |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started