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Varmit B-Gone is a pest control service that operates in a...

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Varmit B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow HOOK Service calls (per subscriber) 0.6 0.9 1.5 Subscribers 1,100 1,200 1,200 2,100 2,100 2,000 March April May June July August rences 3.0 2.4 The average price charged for a service call is $80 of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid in cash Service costs Variable costs Maintenance and repair Depreciation (fixed) Total $29.000 27.00 42.000 5103,000

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