Question
Helen Martin recently opened her own basketweaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of
Helen Martin recently opened her own basketweaving studio. She sells finished baskets in addition to the raw materials needed by customers to weave baskets of their own. Helen has put together a variety of raw material kits, with each kit including materials at various stages of completion. Unfortunately, because of space limitations, Helen is unable to carry all varieties of kits she originally assembled and must choose between two basic packages.
The Basic introductory kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Helen $11 and sells for $26. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit the customer only has to soak the reeds and weave the basket. Helen is able to produce the Stage 2 kit by using the basic materials included in the Basic Kit and adding one-half hour of her own time, which she values at $20 per hour. The kit of dyed and cut reeds sells for $33.
Prepare an incremental analysis for Helens basketweaving studio. (if an amount reduces the net income then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000).)
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