A local bookstore bought more "NHL Stars" calendars than it could sell. It was nearly April and 350 calendars remained in stock. The store paid $3.95 each for the calendars and normally sold them for $8.75.Since February, they had been on sale for $6.00 and two weeks ago the price was dropped to $5.10. Still, few calendars were being sold. The bookstore manager thought it was no longer worthwhile using shelf space for the calendars.

The proprietor of Lightning Collectibles offered to buy all 350 for $105. He intended to store them until the 2011 hockey season was over and then sell them as novelty items.

The bookstore manager was not sure she wanted to sell for $0.30 calendars that cost $3.95. The only alternative, however, was to toss them out because the publisher would not take them back.

Requirement 1. Compute the difference in profit between accepting the $105 offer and tossing the calendars. (Complete all answer boxes. Round your answers to the nearest whole dollar.)

		Sell	Toss	Difference
Profit

Requirement 2. Describe how the 395 X $3.50 = $1,383 paid for the calendars affects your decision.

The amount paid for the calendars is IRRELEVANT / RELEVANT.

The $1,383 paid is a FUTURE COST / PAST COST, A SUNK COST. One that SHOULD / SHOULD NOT affect the decision.