5. At most, Gallatin Carpet Cleaning is making only $2.25 on the Flying N
Ranch job. If more than $2.25 of the $13.50 in Office Expenses are ac-
tually avoidable if the job were not accepted, then the job is actually
losing money.
There is a point at which travel costs eat up all of the profit from a job.
With the company’s current policy of charging a flat fee for carpet clean-
ing irrespective of how far away the client is from the office, there
clearly is some point at which jobs should be turned down. (What if a
potential customer is located in Florida?)
Problem 8-25 (continued)
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