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CoursHeroTranscribedText: Campus Package Delivery (CPD) provides delivery services in and around Paradise. Its profits have...

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CoursHeroTranscribedText: Campus Package Delivery (CPD) provides delivery services in and around Paradise. Its profits have been declining, and management is planning to add an express service that is expected to increase revenue by $50.000 per year, The total cost to lease the necessary additional package delivery vehicles from the local dealer is $7,500 per year. The present manager will continue to supervise all services at no increase in salary. Due to expansion, however, the labor costs and utilities would increase by 50 percent. Rent and other costs will increase by 20 percent. A B 1 CAMPUS PACKAGE DELIVERY 2 Annual Income Statement before Expansion 3 4 Sales revenue $ 152,000 5 Costs 6 Vehicle leases 60,000 7 Labor 48,000 8 Utilities 8,000 9 Rent 16,000 10 Other costs 8,000 11 Manager's salary 24,000 Total costs $ 164.000 13 Operating profit (loss) $ (12,000) 14 a) Prepare a report of the differential costs and revenues if the express service is added. b) Should management start the express service

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