Question

Suppose you run a lawn mowing business. You charge $15 per lawn, you can mow five lawns in an eight hour day, and you work five days a week. You currently have more people asking you to mow their lawns than you can satisfy so you are considering hiring someone to help. Your other option is to rent a riding lawn mower that will enable you to mow seven lawns each day. Your friend Jim, a good worker, will work for $8 per hour and will be able to mow five lawns in an eight hour day also. If you rent a riding mower, it will cost you $100 per week plus $25 for gas and oil.

Required:
What is your best option? Explain why you believe this is your best choice.

Answer 1

Option 2

Step-by-step explanation:

Option 1 If we hire someone to help

Revenue = $15/lawn x 5 lawns per day

Revenue = $75 x 7 days = $525

Total cost = Rate per hour x No. of lawns per day x No, of hours worked

Total cost = $8 x 5 x $8

Total cost = $320 x 7days = 2,240

Profit/Loss = $525- $2,240

Profit/loss = $1,715 loss

Option 2 If we rent a riding mower

Revenue = 7 lawns per day x $15/lawn x 7 days

Revenue = $735

Cost = $100 + $25 for gas and oi

Cost = $125

Profit/loss = $610

The best option would be Option 2 because Firstly it is very much low in cost and provides us a great revenue secondly, it also increases our work efficiency.