## Case Study: Garrison Boutique's Software Implementation and Staffing Decision**Background:**Garrison Boutique, a small novelty store, recently invested $4,000 in a new software program designed to help organize its inventory. Given the steep learning curve of the new software, Garrison needs to decide between hiring two part-time college students or one full-time employee.### Staffing and Costs:- **Part-time College Students:** - Each would work 20 hours per week. - Each would earn $15 per hour. - **Full-time Employee:** - Works 40 hours per week. - Earns $15 per hour plus benefits equivalent to $2 per hour. - **Uniform Costs:** - Employees are provided two polo shirts as uniforms. - Each shirt costs Garrison $10.### Cost Breakdown:Below is a table outlining different costs associated with the new software and staffing choices.| Cost Category | Part-time College Students (per student) | Full-time Employee ||---------------------|------------------------------------------|--------------------|| **Software Cost** | $4,000 | None || **Shirt Cost** | $10 | $20 || **Benefit Cost** | $80 | $2 |### Concepts for Analysis:1. **Relevant Costs**: These are the costs directly affecting the decision, including wages and benefits.2. **Relevant Revenues**: These are any revenues that can be directly attributed to the decision.3. **Sunk Costs**: These are costs that have already been incurred and cannot be recovered (e.g., the software investment).4. **Opportunity Costs**: These represent the benefits foregone by choosing one alternative over another.### Task:Identify the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison. Please list them in order of their dollar amounts as specified:| **Categories** | **First Item** | **Second Item** | **Third Item** ||------------------------|----------------|-----------------|----------------|| **Relevant Costs** | | | || **Relevant Revenues** | | | || **Sunk Costs** | | | || **Opportunity Costs** | | | |### Instructions:For categories with multiple items, list them in the order in which they are presented in the problem

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 $15 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. Software, $4,000 None Shirts, $20 Shirts, $10 Benefits, $80 Benefits, $2 What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison? PLEASE NOTE: For categories with multiple items from the list above, you will list them in the order in which they are presented in the problem and for the proper dollar amount. Categories: First Item Second Item Third Item Relevant Costs Relevant Revenues Sunk Costs Opportunity Costs

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 $15 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. Software, $4,000 None Shirts, $20 Shirts, $10 Benefits, $80 Benefits, $2 What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison? PLEASE NOTE: For categories with multiple items from the list above, you will list them in the order in which they are presented in the problem and for the proper dollar amount. Categories: First Item Second Item Third Item Relevant Costs Relevant Revenues Sunk Costs Opportunity Costs

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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