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Sox Co. (Sox) is analyzing whether to expand its framing business to Kamloops, British Columbia. To analyze the decision, Sox contracted a consultant for $22,000.
Sox Co. (Sox) is analyzing whether to expand its framing business to Kamloops, British Columbia. To analyze the decision, Sox contracted a consultant for $22,000. After analyzing the expansion option, the consultant determined that a manufacturing location of 10,000 square feet would be necessary and cost $75,000 per year. Kamloops has minimal warehouses available, so the consultant put a $5,000 deposit on a potential location. The consultant also determined that six full-time employees would be needed at the new location, which would cost a total of $300,000 per year. A manager from the current operations would relocate there and earn $60,000 per year. Finally, to ensure the proper sales traction occurs in Kamloops, $12,000 per year would need to be spent on marketing. The consultant spent $1,000 sending out surveys in the area to gauge potential client interest. Which one of the following represents the total sunk costs if Sox does NOT proceed with the expansion? Spreadsheet Xlsx Available answer options Select only one option A $ 22,000 B $ 28,000 C $ 88,000 D $415,000
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