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Henderson Designs provides basic interior design services in a small town in the Rocky Mountain area. Lately, the growth in the business has slowed considerably and the managers have been looking at new services that might improve their prospects. The sales manager has suggested that adding some landscape design services would be a nice complement to their existing offerings. The manager put the analysis together and then suddenly quit. You have been asked to reconstruct the analysis. The last known spreadsheet with the analysis is shown as follows. You recall that, in the last meeting, the sales manager estimated that Henderson would probably have to hire some additional employees to do the extra work. The analysis included an estimate that the new service would add about $21,825 to the annual labor costs. Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales revenue Costs Equipment lease Labor Rent Depreciation Utilities Other Total costs Operating profit Status Quo: Current Services $ Henderson Designs Projected Income Statement For the Year $ 103,000 23,000 58,000 23,000 98,500 % Increase (Decrease) Alternative: Enhanced Services % $ 10% $ % 20 % 5% 477,900 113,300 94,575 24,000 Difference 10,300 TAUFIR $ 25,400

Henderson Designs provides basic interior design services in a small town in the Rocky Mountain area. Lately, the growth in the business has slowed considerably and the managers have been looking at new services that might improve their prospects. The sales manager has suggested that adding some landscape design services would be a nice complement to their existing offerings. The manager put the analysis together and then suddenly quit. You have been asked to reconstruct the analysis. The last known spreadsheet with the analysis is shown as follows. You recall that, in the last meeting, the sales manager estimated that Henderson would probably have to hire some additional employees to do the extra work. The analysis included an estimate that the new service would add about $21,825 to the annual labor costs. Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales revenue Costs Equipment lease Labor Rent Depreciation Utilities Other Total costs Operating profit Status Quo: Current Services $ Henderson Designs Projected Income Statement For the Year $ 103,000 23,000 58,000 23,000 98,500 % Increase (Decrease) Alternative: Enhanced Services % $ 10% $ % 20 % 5% 477,900 113,300 94,575 24,000 Difference 10,300 TAUFIR $ 25,400

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter26: Capital Budgeting (capbud)
Section: Chapter Questions
Problem 5R
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Henderson Designs provides basic interior design services in a small town in the Rocky Mountain area. Lately, the growth in the business has slowed considerably and the managers have been looking at new services that might improve their prospects. The sales manager has suggested that adding some landscape design services would be a nice complement to their existing offerings. The manager put the analysis together and then suddenly quit. You have been asked to reconstruct the analysis. The last known spreadsheet with the analysis is shown as follows. You recall that, in the last meeting, the sales manager estimated that Henderson would probably have to hire some additional employees to do the extra work. The analysis included an estimate that the new service would add about $21,825 to the annual labor costs. Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales revenue Costs Equipment lease Labor Rent Depreciation Utilities Other Total costs Operating profit Status Quo: Current Services $ Henderson Designs Projected Income Statement For the Year $ 103,000 23,000 58,000 23,000 98,500 % Increase (Decrease) Alternative: Enhanced Services % $ 10 % $ % 20 % 5% 477,900 113,300 94,575 24,000 Difference $ 10,300 25,400
Transcribed Image Text:Henderson Designs provides basic interior design services in a small town in the Rocky Mountain area. Lately, the growth in the business has slowed considerably and the managers have been looking at new services that might improve their prospects. The sales manager has suggested that adding some landscape design services would be a nice complement to their existing offerings. The manager put the analysis together and then suddenly quit. You have been asked to reconstruct the analysis. The last known spreadsheet with the analysis is shown as follows. You recall that, in the last meeting, the sales manager estimated that Henderson would probably have to hire some additional employees to do the extra work. The analysis included an estimate that the new service would add about $21,825 to the annual labor costs. Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales revenue Costs Equipment lease Labor Rent Depreciation Utilities Other Total costs Operating profit Status Quo: Current Services $ Henderson Designs Projected Income Statement For the Year $ 103,000 23,000 58,000 23,000 98,500 % Increase (Decrease) Alternative: Enhanced Services % $ 10 % $ % 20 % 5% 477,900 113,300 94,575 24,000 Difference $ 10,300 25,400
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