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Campus Package Dclvery (CP) poides delivery services in and around Paradise its prahts have been dedining, and managementis planning to add an express seice that is cpected to increase revcnuc by 5310co per ycar. The tatal cost to lcase tha nccessary addtianal packagc Required: a. Prepare a report of the diflerental costs and revenues if the express service is added (Enter loss values with a minus sign.) Income Statement Status Quo: Altemative: No Express With Express Difference 5 160 000 Coats chidic leas Labor Utlises Rent 300 000 233000 35.000 64,000 Managars Salary Total cost Operating pront(uss) 120 000 S 791000 5 (31,000) b. Snoud management stat the expres5 service? O No

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No express service with express service Difference 1,070,000 310,000 Sales revenue 760,000 Costs: 300,000 233,000 35,000 64,000 39,000 120,000 791,000 31,000 25,000 349,500116,500 17,500 12,800 7,800 0 970,600 179,600 99,400130,400 325,000 vehicles leases Labour Utilites Rent Other costs Manager salary 52,500 76,800 46,800 120,000 Total costs Operating profit loss) No express service with express service Difference 760000 2 Sales revenue 3 Costs: 4 Vehicles leases 5 Labour 6 Utilites 7 Rent 8 Other costs 9 Manager salary 10 Total costs 11 Operating profit(loss) B2-B10 12 -B2+310000 C2-B2 300000 233000 35000 64000 39000 120000 SUM(B4:B9) B4+25000 B5*1.5 B6*1.5 B7*1.2 B8*1.2 -B9 SUM(C4:C9) -C2-C10 C4-B4 C5-B5 C6-B6 C7-B7 C8-B8 C9-B9 C10-B10 -C11-B11

b)Yes since the operating income is increasing

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