Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Infinity Designs, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling
Infinity Designs, 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 Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous | ||
jobs. | ||
The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: | ||
Revenue | $201,000 | |||
Less: | ||||
Design supplies (variable cost) | $16,000 | |||
Salary of Samantha Spade (owner) | 80,000 | |||
Salary of Kim Bridesdale (full time employee) | 55,000 | |||
Rent | 18,000 | |||
Utilities | 6,000 | |||
Depreciation of office equipment | 3,600 | |||
Printing of advertising materials | 700 | |||
Advertising in Middleton Journal | 2,500 | |||
Travel expenses other than depreciation of autos (variable cost) | $3,000 | |||
Depreciation of company cars | 9,000 | |||
Required: | ||||
Calculate the impact of the exhibit on company profit. |
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