Henley Horticulture provides and maintains live plants in office buildings. The

Q: Henley Horticulture provides and maintains live plants in office buildings. The

Contribution Format Income Statement for the month: Particulars Calculation Amount ($) Revenue from Customers 31 * 888 27528 Less: Variable Cost (19 + 2) * 888 18648 Contribution 8880 Less: Fixed Cost 2012 + 3330 5342 Net Income 3538 Particulars Calculation Amount ($) Revenue from Customers 31 * 888 27528 Less: Variable Cost (19 + 2) * 888 18648 Contribution 8880 Less: Fixed Cost 2012 + 3330 5342 Net Income 3538

ID: 2493456 • Letter: H

Question

Henley Horticulture provides and maintains live plants in office buildings. The company’s 888 customers are charged $31 per month for this service, which includes weekly watering visits. The variable cost to service a customer’s location is $19 per month. The company incurs $2,012 each month to maintain its fleet of four service vans and $3,330 each month in salaries. Henley pays a bookkeeping service $2 per customer each month to handle all invoicing and accounting functions. Prepare Henley’s contribution format income statement for the month.

Explanation / Answer

Contribution Format Income Statement for the month:

Particulars

Calculation

Amount ($)

Revenue from Customers

31 * 888

27528

Less: Variable Cost

(19 + 2) * 888

18648

Contribution

8880

Less: Fixed Cost

2012 + 3330

5342

Net Income

3538