Pharoah Horticulture provides and maintains live plants in office buildings. The company's 916 customers are charged $32 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $19 per month. The company incurs $2,490 each month to maintain its fleet of four service vans and $3,392 each month in salaries. Pharoah pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions.
Pharoah Horticulture provides and maintains live plants in office buildings. The company's 916 customers are charged $32 per month for this service, which includes weekly watering visits. The variable cost to service a customer's location is $19 per month. The company incurs $2,490 each month to maintain its fleet of four service vans and $3,392 each month in salaries. Pharoah pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Pharoah Horticulture provides and
maintains live plants in office buildings. The
company's 916 customers are charged $32
per month for this service, which includes
weekly watering visits. The variable cost to
service a customer's location is $19 per
month. The company incurs $2,490 each
month to maintain its fleet of four service
vans and $3,392 each month in salaries.
Pharoah pays a bookkeeping service $2 per
customer each month to handle all
invoicing and accounting functions.
les Revenue
riable Expenses
ervice Expense
lookkeeping Expense
tal Variable Expenses
›ntribution Margin
ced Expenses
alaries Expense
'ans Expense
tal Fixed Expenses
>erating Income
$
17404
1832
3392
2490
$
29312
19236
10076
5882
4194
Per Unit
19
2
21
11
What is the expected monthly operating
income if 190 customers are added?
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