You are a senior Accountant at LMNOP accounting in Kamloops. You have been given a file of a new client, Drew McOuat. Drew has started a carwash company called "Easy Breezy, cars so cleansy". Car washes cost $50 per wash and has a direct cost of $30 per wash. Drew's company has fixed costs of $75.000. Drew expects Easy Breezy to clean about 6,000 cars for the year. . He has asked you to solve the following. Drew spent a week at a business retreat in Italy and came back to Easy Breezy with several ideas on changing operations and needs your help. He has sent you an e-mail with the following information: Buongiorno Senior Accountant! While I was relaxing in the hills of Tuscany, I had an epiphany on ideas for the business. Can you please help figure out if these changes make business sense for Easy Breezy? Treat each scenario individually. i. The one I'm really interested in doing is this option. Opening a second location, this will add $120,000 of costs to the business, 85% of which is fixed II. I would raise my selling price to $55 per wash and between the two locations I think I'll wash 14,000 cars for the year. I'll need more staff so my variable cost per wash will go up an additional $5 per wash 37(DLIVC lii. If you think it will help, I was going to offer a coupon for $20 washes to advertise the business. I think it would attract 4,000 additional new customers above the 14,000 1 think I'm going to have. I'd only run the promotion for this year. You are a senior Accountant at LMNOP accounting in Kamloops. You have been given a file of a new client, Drew McOuat. Drew has started a carwash company called "Easy Breezy, cars so cleansy". Car washes cost $50 per wash and has a direct cost of $30 per wash. Drew's company has fixed costs of $75.000. Drew expects Easy Breezy to clean about 6,000 cars for the year. . He has asked you to solve the following. Drew spent a week at a business retreat in Italy and came back to Easy Breezy with several ideas on changing operations and needs your help. He has sent you an e-mail with the following information: Buongiorno Senior Accountant! While I was relaxing in the hills of Tuscany, I had an epiphany on ideas for the business. Can you please help figure out if these changes make business sense for Easy Breezy? Treat each scenario individually. i. The one I'm really interested in doing is this option. Opening a second location, this will add $120,000 of costs to the business, 85% of which is fixed II. I would raise my selling price to $55 per wash and between the two locations I think I'll wash 14,000 cars for the year. I'll need more staff so my variable cost per wash will go up an additional $5 per wash 37(DLIVC lii. If you think it will help, I was going to offer a coupon for $20 washes to advertise the business. I think it would attract 4,000 additional new customers above the 14,000 1 think I'm going to have. I'd only run the promotion for this year
