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Correct? 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
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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. B-YOU Annual Income Statement Sales revenue $ 242,780 Costs Labor 118,000 Equipment lease 17,780 Rent 13,700 Supplies 10,980 Officers' salaries 67,280 Other costs 8,700 Total costs $ 236,880 Operating profit (loss) 6,780 If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $81,500. Equipment lease will Increase by 5 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. Required: a. What are the differential costs that would be incurred as a result of taking the contract? Sales revenue 81,5001 885 Consultant labor Equipment lease Supplies Other costs 1,090 1,305 Total costs S 84.780Step by Step Solution
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