e7.9

Anna Garden recently opened her own basketweaving studio. She sells finished baskets in addition to selling the raw materials needed by customers to weave baskets of their own. Unfortunately, owing to space limitations, Anna is unable to carry all varieties of kits originally assembled and must choose between two basic packages. The Basic Kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Anna $8 and sells for $22. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer need only soak the reeds and weave the basket. Anna produces the Stage 2 kit by using the materials included in the Basic Kit. Because she is more efficient at cutting and dying reeds than her average customer, Anna is able to produce two Stage 2 kits in one hour from one Basic Kit. (She values her time at $26 per hour.) The Stage 2 kit sells for $36.

Prepare an incremental analysis for the Annas basketweaving studio. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Sell (Basic Kit)		Process Further (Two Stage 2 Kits)		Net Income Increase (Decrease)
Sales per unit		$		$		$
Costs per unit
Direct materials		$		$		$
Direct labor
Total		$		$		$
Net income per unit		$		$		$

eTextbook and Media

Should Annas carry the basic introductory kit with undyed and uncut reeds or the Stage 2 kit with reeds already dyed and cut?

Anna should carry the ______________

The gase Kt i euses u dret une t sets vith dye e ded for eavnsong bas at T s base package costs A and pells for $22 The second kit. esled Stags 2 e das e t eeds that have #ready been dyed with this kit the custo er need only seek the matar ials nudad n the Base K. Baca ss sha s mare .cant at cutting and dying raads than har avarage e stanar, Anna s able to produca t o Stage 2 kits in one hour fram one Base K. ha va as har ena at 26 Nr hau Tha Stage 2 kitsas far S36. sets and weave the bas ut Anna produces the Stage 2 kit by a Prapare an incramantal analysis for tha Anna's Ender negative amounts using either netive sign preceding the numberea-45 or parentheesea 145 Net Income Increase Decreasel Sell Basic Kit Process Further Two Stage 2 Kits) Salas parunt Costs parunit Diract macarials Diract labor Total Nat incoma par un S eTextbook and Media Shauld Anna's carry the basic intraductory kit with undyed and unout reads or tha Staga 2 kit with raads araadydyadand out? Anna shoud carry tha