Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 variable 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. Contribution Margin per Service Call (Price - Scenario Excellent Fair Poor In addition to the variable costs of service, the owner estimates that other costs are $49,000 plus $8 for each service call in excess of 3,600 calls. Annual administrative and marketing costs are estimated to be $31,000 plus 10 percent of the contribution margin Excellent Fair Poor Excellent Required: Use a spreadsheet to prepare an analysis of the possible operating income for Lamphere Lawn Care similar to that in Exhibit 1316 What is the range of possible operating incomes? Fair Poor Excellent Fair Poor Number of Variable cost) Service Calls $ 30 20 12 Contribution Margin Per Service Call S S $ $ $ $ $ $ $ 30 20 12 30 20 12 30 20 12 10,400 7,950 5,650 Number of Service Calls 10,400 10,400 10,400 7,950 7,950 7,950 5,650 5,650 5,050 Total Contribution. Other Costs Marketing and Administrative Margin Operating Profit (Loss) $ S S $ $ $ 5 $ $ 0 0 0 0 0 0 0 0 0

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 variable 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. Contribution Margin per Service Call (Price - Scenario Excellent Fair Poor In addition to the variable costs of service, the owner estimates that other costs are $49,000 plus $8 for each service call in excess of 3,600 calls. Annual administrative and marketing costs are estimated to be $31,000 plus 10 percent of the contribution margin Excellent Fair Poor Excellent Required: Use a spreadsheet to prepare an analysis of the possible operating income for Lamphere Lawn Care similar to that in Exhibit 1316 What is the range of possible operating incomes? Fair Poor Excellent Fair Poor Number of Variable cost) Service Calls $ 30 20 12 Contribution Margin Per Service Call S S $ $ $ $ $ $ $ 30 20 12 30 20 12 30 20 12 10,400 7,950 5,650 Number of Service Calls 10,400 10,400 10,400 7,950 7,950 7,950 5,650 5,650 5,050 Total Contribution. Other Costs Marketing and Administrative Margin Operating Profit (Loss) $ S S $ $ $ 5 $ $ 0 0 0 0 0 0 0 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Please answer do not image format
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 variable 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. Contribution Margin per Service Call (Price - Number of Variable cost) Service Calls Scenario Excellent Fair Poor In addition to the variable costs of service, the owner estimates that other costs are $49,000 plus $8 for each service call in excess of 3,600 calls. Annual administrative and marketing costs are estimated to be $31,000 plus 10 percent of the contribution margin Excellent Fair Poor Excellent Required: Use a spreadsheet to prepare an analysis of the possible operating income for Lamphere Lawn Care similar to that in Exhibit 1316 What is the range of possible operating incomes? Fair Poor Excellent Fair Poor Contribution Margin Per Service Call S $ $ $ $ $ $:30 20 12 $ $ S5 $ 882885 30 20 12 30 20 12 30 20 12 10,400 7,950 5,650 Number of Service Calls 10,400 10,400 10,400 7.950 7,950 7,950 5,650 5,650 5,650 Total Contribution Margin Other Costs Marketing and Administrative Operating Profit (Loss) $ S $ $ $ $ 5 $ $ 0 0 0 0 0 0 0. 0. 0
Transcribed Image Text: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 variable 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. Contribution Margin per Service Call (Price - Number of Variable cost) Service Calls Scenario Excellent Fair Poor In addition to the variable costs of service, the owner estimates that other costs are $49,000 plus $8 for each service call in excess of 3,600 calls. Annual administrative and marketing costs are estimated to be $31,000 plus 10 percent of the contribution margin Excellent Fair Poor Excellent Required: Use a spreadsheet to prepare an analysis of the possible operating income for Lamphere Lawn Care similar to that in Exhibit 1316 What is the range of possible operating incomes? Fair Poor Excellent Fair Poor Contribution Margin Per Service Call S $ $ $ $ $ $:30 20 12 $ $ S5 $ 882885 30 20 12 30 20 12 30 20 12 10,400 7,950 5,650 Number of Service Calls 10,400 10,400 10,400 7.950 7,950 7,950 5,650 5,650 5,650 Total Contribution Margin Other Costs Marketing and Administrative Operating Profit (Loss) $ S $ $ $ $ 5 $ $ 0 0 0 0 0 0 0. 0. 0
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Enterprise resource planning (ERP)
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS