Question
Tri Town Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in
Tri Town Interiors, 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 Middleton Home and Garden Expo. The exhibit will cost the company $14,980 for space. At the show, Tri Town Interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs
The company estimates that revenue will increase by $40,060 over the next year as a result of the exhibit. For the previous year, profit was as follows:
Revenue $213,615
Less:
Design supplies $18,106
Salary of Samantha Spade (owner) 81459
Salary of Kim Bridesdale (full-time employee) 56,285
Rent 18811
Utilities 6,570
Depreciation of office equipment 4,000
Printing of advertising materials 812
Advertising in Middleton Journal 3,080
Travel expenses other than depreciation of autos 2,890
Depreciation of company cars 9,930. (201,943)
Net income $11,672
Assume not design supplies in trouble other than depreciation are variable cost.
Company profit will ______(increase/decrease) by ______
should the company exhibit at the home show? Yes or no
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