1) KennelInteriors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $15,080for space. At the show,KennelInteriors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $40,250over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue				$214,366
Less:
	Design supplies		$18,022
	Salary of Samantha Spade (owner)		82,404
	Salary of Kim Bridesdale (full-time employee)		55,845
	Rent		18,958
	Utilities		7,100
	Depreciation of office equipment		4,210
	Printing of advertising materials		826
	Advertising inMiddleton Journal		3,000
	Travel expenses other than depreciation of autos		3,170
	Depreciation of company cars		10,590		204,125
Net income				$10,241

Assume that design supplies and travel other than depreciation are variable costs. Calculate the impact of the exhibit on company profit.(Round intermediate calculations to 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)

Company profit willselect an option increase decrease byenter a dollar amount

Should the company exhibit at the home show?

The companyselect an option should should not exhibit at the home show.

2) PaverVillage sells home, and office furniture. Currently the home product line takes up approximately 50 percent of the company's retail floor space. The president ofPaverVillage is trying to decide whether the company should continue offering office furniture or concentrate on home furniture. Below is a product line income statement for the company. If office furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of home furniture can increase by15percent without affecting direct fixed costs. Allocated fixed costs are assigned based on relative sales.

			Home Furniture		Office Furniture		Total
Sales		$1,420,000		$1,093,400		$2,513,400
Less cost of goods sold		923,000		795,200		1,718,200
Contribution margin		497,000		298,200		795,200
Less direct fixed costs:
	Salaries		173,950		173,950		347,900
	Other		59,640		59,640		119,280
Less allocated fixed costs:
	Rent		13,330		9,986		23,316
	Insurance		3,660		2,669		6,329
	Cleaning		3,650		3,290		6,940
	President's salary		69,390		62,769		132,159
	Other		6,300		5,543		11,843
Net income / (loss)		$167,080		$(19,647)		$147,433

Determine whetherPaverVillage should discontinue the office furniture line and the financial benefit (cost) of dropping it.(Round answer to 0 decimal places, e.g. 5,275.)

Net income without Office Furniture is $enter net income without office furniture in dollars . The companyselect an option should drop should not drop the Home Office Furniture product line.

3) The editor ofDuffy Dogmagazine is considering three alternative prices for her new monthly periodical. Her estimate of price and quantity demanded are:

Price		Quantity Demanded
$7.94		24,000
$6.96		31,700
$5.89		36,600

Monthly costs of producing and delivering the magazine include $94,000of fixed costs and variable costs of $2.10per issue. Which price will yield the largest monthly profit?(Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Price		Profit/(loss)
$7.94		$enter a dollar amount
$6.96		$enter a dollar amount
$5.89		$enter a dollar amount

A price of $enter the largest monthly profit amount in dollars rounded to 2 decimal places yields the largest monthly profit.

4) Cinrichproduces a hard disk drive that sells for $175per unit. The cost of producing25,000drives in the prior year was:

Direct material		$	725,000
Direct labor			475,000
Variable overhead			200,000
Fixed overhead			1,500,000
Total cost		$	2,900,000

At the start of the current year, the company received an order for3,060drives from a computer company in China. Management ofCinrichhas mixed feelings about the order. On one hand, they welcome the order because they currently have excess capacity. Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $125per unit. What will be the effect on profit of accepting the order?(Enter decrease in profit using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Profit willselect between increase and decrease increase decrease by $enter a dollar amount .