Infinity Designs, 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 smulate business, the company is considering exhibing at the Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its porolio of previous jobs. The company esmates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue $201,000 Less: Design supplies (variable cost) $15,000 Salary of Samantha Spade (owner) 80,000 Salary of Kim Bridesdale (full me employee) 55,000 Rent 18,000 Ulies 6,000 Depreciaon of office equipment 3,600 Prinng of adversing materials 700 Adversing in Middleton Journal 2,500 Travel expenses other than depreciaon of autos (variable cost) $3,000 Depreciaon of company cars 9,000 Required: Calculate the impact of the exhibit on company profit.
Infinity Designs, 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 smulate business, the
company is considering exhibing at the
Home and Garden Expo. The exhibit will
cost the company $12,000 for space. At the
show, Infinity Designs will present a slide
show on a PC, pass out brochures that are
printed previously, (the company printed
more than needed), and show its porolio of
previous
jobs.
The company
esmates that
revenue will increase
by $36,000 over the
next year as a result
of the exhibit. For the
previous year, profit
was as follows:
Revenue $201,000
Less:
Design supplies (variable cost) $15,000
Salary of Samantha Spade (owner) 80,000
Salary of Kim Bridesdale (full me
employee)
55,000
Rent 18,000
Ulies 6,000
Depreciaon of office equipment 3,600
Prinng of adversing materials 700
Adversing in Middleton Journal 2,500
Travel expenses other than depreciaon
of autos (variable cost)
$3,000
Depreciaon of company cars 9,000
Required:
Calculate the impact of the exhibit on company profit.
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