Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed...

80.2K

Verified Solution

Question

Accounting

image
image
Lamphere Lawn Care provides lawn and gardening services. The price of the service is fixed at a flat rate for each service, and most costs of providing the service are the same, given the similarity in the lawns and lots. The owner budgets income by estimating two factors that fluctuate with the economy: the contribution margin associated with each service call and the number of customers who will request lawn service. Looking at next year, the owner develops the following estimates of contribution margin (price less varlable cost of the service, including labor) and the estimated number of service calls. Although the owner understands that it is not strictly true, the owner assumes that the cost of fuel and the number of customers are independent. In addition to the variable costs of service, the owner estimates that other costs are $59.000 plus $8 for each service call in excess of 6.200 calls. Annual administrative and morketing costs are estimated to be $57.000 plus 10 percent of the contribution margin. Pequired: Use a spreadsheet to prepore an analysis of the possble operating income for Lamphere Lawn Care similar to that in Exbbibi.1316. What is the range of possible onerating incomes? In addition to the variable costs of service, the owner estimates that other casts are $59,000 plus $8 for each service call in excess of 6,200 calls. Annual administrative and marketing costs are estimated to be $57.000 plus 10 percent of the contribution margin. Required: Use a spreadsheet to prepare an analysis of the possible operating income for Lamphere Lawn Care similar to that in Exhibit 33.16. What is the range of possible operating incomes

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students