This exercise continues the Sherman Lawn Service, Inc., situation from Exercise 18-33 of...

This exercise continues the Sherman Lawn Service, Inc., situation from Exercise 18-33 of Chapter 18. Sherman Lawn Service currently charges $50 for a standard lawn service and incurs $20 in variable cost. Assume fixed costs are $1,200 per month. Sherman has been offered a special contract for $35 each for 10 lawns in one subdivision. This special contract will not affect Sherman1s other business.

Requirements

1. Should Sherman take the special contract?

2. What will Sherman’s incremental profit be on the special contract?