Wilcox Vehicle Inspections specializes in inspecting commercial trucks that have been returned to leasing companies at the end of their contracts. Wilcox's charge per inspection is $75, and its average cost per inspection is $20. The owner wants to expand the business by hiring another employee and acquiring additional inspection equipment. The fixed costs for the new employee and equipment would be $4,500 per month. Required: How many inspections per month would the new employee have to perform to earn a profit of $2,000?

Wilcox Vehicle Inspections specializes in inspecting commercial trucks that have been returned to leasing companies at the end of their contracts. Wilcox's charge per inspection is $75, and its average cost per inspection is $20. The owner wants to expand the business by hiring another employee and acquiring additional inspection equipment. The fixed costs for the new employee and equipment would be $4,500 per month. Required: How many inspections per month would the new employee have to perform to earn a profit of $2,000?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 12EA: Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a...

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