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Question - 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.
Required - Calculate the annual incremental revenue associated with being open on Saturday.
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