accounting

problem, Ron went to his local banker, ABC Bank, to secure additional financing to expand the business. ABC Bank indicated that at this time they will not be able to increases the company's operating line of credit. Financial information are provided in LAIVIL. Ron is contemplating three options to grow the business. The first one is organic growth. Currently, Martha, Ron' wife is handling all administrative, selling, and accounting tasks of the company at a salary of $10,000 per year. Ron and Harry pride themselves in each unit produced and consider it a work of art, where Ron inspects and signs each car to give it authenticity. Ron trusts only Harry with working on the products, and therefore their capacity is limited to 5,400 hours per year. Harry has approached Ron with a suggestion to double the current location size to a new facility that would create efficient workplace leading to decreasing the time spent working on each unit by 40%. This will increase the fixed costs by $12,000 per year for the incremental increase in rent. He also suggested that they can hire an additional employee to handle receiving, packing and unpacking of the inventory. The new employee would be paid $24,000 per year. With the anticipated demand, Ron believes that he can increase each unit price from all models by 10%, and still be able to sell all units produced. problem, Ron went to his local banker, ABC Bank, to secure additional financing to expand the business. ABC Bank indicated that at this time they will not be able to increases the company's operating line of credit. Financial information are provided in LAIVIL. Ron is contemplating three options to grow the business. The first one is organic growth. Currently, Martha, Ron' wife is handling all administrative, selling, and accounting tasks of the company at a salary of $10,000 per year. Ron and Harry pride themselves in each unit produced and consider it a work of art, where Ron inspects and signs each car to give it authenticity. Ron trusts only Harry with working on the products, and therefore their capacity is limited to 5,400 hours per year. Harry has approached Ron with a suggestion to double the current location size to a new facility that would create efficient workplace leading to decreasing the time spent working on each unit by 40%. This will increase the fixed costs by $12,000 per year for the incremental increase in rent. He also suggested that they can hire an additional employee to handle receiving, packing and unpacking of the inventory. The new employee would be paid $24,000 per year. With the anticipated demand, Ron believes that he can increase each unit price from all models by 10%, and still be able to sell all units produced