B$-$You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a high$-$tech research firm approached B$-$You's owner with an offer to contract for one year with B$-$You to improve the interpersonal skills of a newly hired manager. B$-$You reported the following costs and revenues during the past year $($before the proposed contract$).$

B$-$YOU

Annual Income Statement

Sales revenue $ $550,000$

Costs

Labor $260,000$

Equipment lease $40,000$

Rent $35,000$

Supplies $27,000$

Officers' salaries $160,000$

Other costs $17,000$

Total costs $ $539,000$

Operating profit $($loss$)$ $ $11,000$

If B$-$You decides to take the contract to help the manager, it will hire a full$-$time consultant at $$85,000.$ The equipment lease will increase by $20$ percent. Supplies will increase by an estimated $10$ percent and other costs by $15$ percent. The existing building has space for the new consultant. No new offices will be necessary for this work.

Problem $1-45($Static$)$ Part a

Required:

a$.$ What are the differential costs that would be incurred as a result of taking the contract?