question13

Sheridan manufactures pre-made scrapbook pages for scrapbookers who don't have time to create their own pages. The clients need only insert their pictures on the pages, It currently sells a child's scrapbook with pre-made pages for $50. Production costs are $22 variable and $10 fixed. The company is considering creating scrapbook kits instead to save labour costs. They are expecting to sell these laits for $42 each and save $9 in variable costs. Prepare an incremental analysis. (ff an amount reduces the net income then enter with a negative sign preceding the number es - 45,000 or parenthesis, eg. (45,000). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem) Should the company begin to seil kits or continue to sell pre-made scrapbooks