Andrew Sinclair operates a lawn carebusiness. He offers customers a choiceof two services. The first service, basiclawn care, includes mowing andtrimming of all lawn areas. Andrew billsthese customers $38 per hour, and hisvariable cost for providing this serviceis $26 per hour. Andrew also offersdeluxe lawn care services, whichincludes flower bed maintenance inaddition to basic lawn care. He bills hiscustomers $61 per hour for this service,and his variable cost for providing thisservice is $25 per hour. Andrewcurrently spends 1 hour of his timeproviding deluxe lawn care services forevery 3 hours of basic lawn careservices. Andrew also incurs $137,376 infixed costs per year running hisbusiness.What is Andrew's profit equation?

A profit equation is the equation, which is used by the company through which it can be easily,…

Answered: What is Andrew's profit equation?

Business

Accounting

What is Andrew's profit equation?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 25P

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Question

Andrew Sinclair operates a lawn care
business. He offers customers a choice
of two services. The first service, basic
lawn care, includes mowing and
trimming of all lawn areas. Andrew bills
these customers $38 per hour, and his
variable cost for providing this service
is $26 per hour. Andrew also offers
deluxe lawn care services, which
includes flower bed maintenance in
addition to basic lawn care. He bills his
customers $61 per hour for this service,
and his variable cost for providing this
service is $25 per hour. Andrew
currently spends 1 hour of his time
providing deluxe lawn care services for
every 3 hours of basic lawn care
services. Andrew also incurs $137,376 in
fixed costs per year running his
business.
What is Andrew's profit equation?

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