Option 1 is to rent-to-own for five years a $20,000 large riding zero-turn lawnmower for $4,000 per year and hire one person to operate this for $15 an hour. With this option, the lawns will be mowed very quickly in very little time per lawn. Option 2 is to rent to own for five years push mowers for $200 per mower for $40 per year and hire high schoolers for $15 per hour to push these 3 mowers. With this option it will take quite a bit longer to mow each lawn.
Questions:
1. Which of these options has a higher fixed cost? Which has higher variable cost per unit?
2. Which of these options has a higher breakeven point?
3. If demand is low and we mow under 20 yards per week, under which option will we lose the most money? Explain.
4. If we operate far beyond our breakeven point (and still within the relevant range of the large mower) and mow 300 yards a week (something we can do with the large riding zero-turn lawnmower). At this level, which option will be more profitable or have the highest potential for profit?

Trey morgan is an employee who is paid monthly. for the month of january of the current year, he earned a total of $4,538. the fica tax for social security is 6.2% of the first $118,500 earned each calendar year, and the fica tax rate for medicare is 1.45% of all earnings for both the employee and the employer. the amount of federal income tax withheld from his earnings was $680.70. his net pay for the month is .

During the holiday season, maria's department store works with a contracted employment agency to bring extra workers on board to handle overflow business, and extra duties such as wrapping presents. maria's is using during these rush times.

Selected information about income statement accounts for the reed company is presented below (the company's fiscal year ends on december 31): 2018 2017sales $ 4,400,000 $ 3,500,000cost of goods sold 2,860,000 2,000,000administrative expenses 800,000 675,000selling expenses 360,000 312,000interest revenue 150,000 140,000interest expense 200,000 200,000loss on sale of assets of discontinued component 50,000 —on july 1, 2018, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by gaap. the assets of the component were sold on september 30, 2018, for $50,000 less than their book value. results of operations for the component (included in the above account balances) were as follows: 1/1/18-9/30/18 2017 sales $ 400,000 $ 500,000 cost of goods sold (290,000 ) (320,000 )administrative expenses (50,000 ) (40,000 )selling expenses (20,000 ) (30,000 )operating income before taxes $ 40,000 $ 110,000 in addition to the account balances above, several events occurred during 2018 that have not yet been reflected in the above accounts: a fire caused $50,000 in uninsured damages to the main office building. the fire was considered to be an infrequent but not unusual event.inventory that had cost $40,000 had become obsolete because a competitor introduced a better product. the inventory was sold as scrap for $5,000.income taxes have not yet been recorded.required: prepare a multiple-step income statement for the reed company for 2018, showing 2017 information in comparative format, including income taxes computed at 40% and eps disclosures assuming 300,000 shares of common stock. (amounts to be deducted should be indicated with a minus sign. round eps answers to 2 decimal places.)