Question
Clinton Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling
Clinton Interiors, 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 $14,910 for space. At the show, Clinton Interiors 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 $40,320 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue $212,557
Less:
Design supplies $18,026
Salary of Samantha Spade (owner) 82,165
Salary of Kim Bridesdale (full-time employee) 56,029
Rent 18,815 Utilities 6,400
Depreciation of office equipment 3,890
Printing of advertising materials 844
Advertising in Middleton Journal 3,180
Travel expenses other than depreciation of autos 3,070
Depreciation of company cars 9,370 201,789
Net income $10,768
Assume that design supplies and travel other than depreciation are variable costs.
Calculate the impact of the exhibit on company profit. (Round intermediate calculationsto 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)
Company profit will________ by _________Should the company exhibit at the home show? The company exhibit at the home show.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started