0 Required Information Problem 1-45 (Algo) Cost Data for Managerial Purposes (LO 1-3) [The following information applies to the questions displayed below.] B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a high-tech research firm approached B-You's owner with an offer to contract for one year with B-You to improve the interpersonal skills of a newly hired manager. B-You reported the following costs and revenues during the past year (before the proposed contract). Sales revenue Costs B-YOU Annual Income Statement Labor Equipment lease Rent Supplies Officers' salaries Other costs Total costs Operating profit (loss) $ 580,000 260,000 46,000 35,000 36,000 160,000 26,000 $ 563,000 $ 17,000 If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $86,500. The equipment lease will increase by 20 percent. Supplies will increase by an estimated 10 percent and other costs by 15 percent. The existing building has space for the new consultant. No new offices will be necessary for this work. Problem 1-45 (Algo) Part c Required: c. What considerations, other than costs, do you think are necessary before making this decision? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. Profitability of the other contracts. Current financial position of the company. Whether the contract will provide for more revenues in the future. whether this will enable the company to get into a new, profitable line of business. What other opportunities the company has for expanding.
0 Required Information Problem 1-45 (Algo) Cost Data for Managerial Purposes (LO 1-3) [The following information applies to the questions displayed below.] B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a high-tech research firm approached B-You's owner with an offer to contract for one year with B-You to improve the interpersonal skills of a newly hired manager. B-You reported the following costs and revenues during the past year (before the proposed contract). Sales revenue Costs B-YOU Annual Income Statement Labor Equipment lease Rent Supplies Officers' salaries Other costs Total costs Operating profit (loss) $ 580,000 260,000 46,000 35,000 36,000 160,000 26,000 $ 563,000 $ 17,000 If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $86,500. The equipment lease will increase by 20 percent. Supplies will increase by an estimated 10 percent and other costs by 15 percent. The existing building has space for the new consultant. No new offices will be necessary for this work. Problem 1-45 (Algo) Part c Required: c. What considerations, other than costs, do you think are necessary before making this decision? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. Profitability of the other contracts. Current financial position of the company. Whether the contract will provide for more revenues in the future. whether this will enable the company to get into a new, profitable line of business. What other opportunities the company has for expanding.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required Information
Problem 1-45 (Algo) Cost Data for Managerial Purposes (LO 1-3)
[The following information applies to the questions displayed below.]
B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a
high-tech research firm approached B-You's owner with an offer to contract for one year with B-You to improve the
interpersonal skills of a newly hired manager. B-You reported the following costs and revenues during the past year
(before the proposed contract).
Sales revenue
Costs
Labor
Equipment lease
B-YOU
Annual Income Statement
Rent
Supplies
Officers' salaries
Other costs
Total costs
Operating profit (loss)
$ 580,000
260,000
46,000
35,000
36,000
160,000
26,000
$ 563,000
$ 17,000
If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $86,500. The equipment
lease will increase by 20 percent. Supplies will increase by an estimated 10 percent and other costs by 15 percent. The
existing building has space for the new consultant. No new offices will be necessary for this work.
Problem 1-45 (Algo) Part c
Required:
c. What considerations, other than costs, do you think are necessary before making this decision?
Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct
answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark
will be automatically graded as Incorrect.
Whether the contract will provide for more revenues in the future.
Whether this will enable the company to get into a new, profitable line of business.
What other opportunities the company has for expanding.
Profitability of the other contracts.
Current financial position of the company.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce889f4d-931c-4f98-a7a9-8f932d9b0537%2F33c4c96e-d589-4980-97ca-e90f038b05fb%2F7advvj_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
Problem 1-45 (Algo) Cost Data for Managerial Purposes (LO 1-3)
[The following information applies to the questions displayed below.]
B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of a
high-tech research firm approached B-You's owner with an offer to contract for one year with B-You to improve the
interpersonal skills of a newly hired manager. B-You reported the following costs and revenues during the past year
(before the proposed contract).
Sales revenue
Costs
Labor
Equipment lease
B-YOU
Annual Income Statement
Rent
Supplies
Officers' salaries
Other costs
Total costs
Operating profit (loss)
$ 580,000
260,000
46,000
35,000
36,000
160,000
26,000
$ 563,000
$ 17,000
If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $86,500. The equipment
lease will increase by 20 percent. Supplies will increase by an estimated 10 percent and other costs by 15 percent. The
existing building has space for the new consultant. No new offices will be necessary for this work.
Problem 1-45 (Algo) Part c
Required:
c. What considerations, other than costs, do you think are necessary before making this decision?
Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct
answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark
will be automatically graded as Incorrect.
Whether the contract will provide for more revenues in the future.
Whether this will enable the company to get into a new, profitable line of business.
What other opportunities the company has for expanding.
Profitability of the other contracts.
Current financial position of the company.
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