Reference no: EM132470870
Harris Horticulture provides and maintains live plants in office buildings. The company's 850 customers are charged $40 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $20 per month. The company incurs $2,000 each month to maintain its fleet of four service vans and $3,000 each month in salaries. Harris pays a bookkeeping service $3 per customer each month to handle all invoicing and accounting functions.
Required
Question a. Prepare Harris's contribution format income statement for the month.
Question b. What is the expected monthly operating income if 150 customers are added?
Question c. Mr. Harris 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 $20,400 per year plus $1 per customer per month.
Option 2: Hire a part-time bookkeeper for $27,000 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 850, 1,000, and 1,100.
Question d. Besides the bookkeeping costs incurred, what should Mr. Harris consider before he makes a change in bookkeeping services?
What is universal sports exchange operating profit equation
: Determine What is Universal Sports Exchange's operating profit equation? Prepare the contribution format income statement for the year.
|
Individual tax return for don and megan draper
: Individual tax return for Don and Megan Draper that is both professional in appearance and technically correct - perform a search for the specific forms
|
Describe the pathophysiology of a stroke
: Describe the pathophysiology of a stroke. What would your nursing assessment consist of? What should you be cognitive of with stroke patients?
|
Determine costs incurred by universal sports exchange
: Determine and Identify each of the costs incurred by Universal Sports Exchange in terms of its cost behavior-variable, fixed, mixed, or step.
|
What is the expected monthly operating income
: What is the expected monthly operating income? Compare the current bookkeeping cost with the two options at customer levels of 850, 1,000, and 1,100.
|
Prepared in good form a working paper
: Prepared in good form a working paper and conclude whether the auditor can rely on the control of completeness of sales and receivables
|
Write four complete substantive procedures for abc
: Write 4 complete substantive procedures for ABC. For each audit procedure, be clear in the type of procedure e.g. tracing, vouching, observing, scanning
|
Determine and prepare a retained earnings statement
: Prepare a 12/31/20 balance sheet. Refer to the Scientific Products (Illustration 5-16) exampl of the text for format suggestions.
|
OM 2057 Introduction to Research Methodology
: OM 2057 Introduction to Research Methodology Assignment Help and Solution, International College for Engineering and Management - Assessment Writing Service
|