Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?
Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.8P
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![Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its
inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two
part-time college students or one full-time employee. Each college student would work 20 hours per week, and would
earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the
equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost
Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff3ee45de-70c7-4745-bc62-53c9dde00f53%2F0e326a97-5b69-4984-bd63-a4f902de4363%2F064x0rg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its
inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two
part-time college students or one full-time employee. Each college student would work 20 hours per week, and would
earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the
equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost
Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?
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