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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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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?
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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