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). Item Sales revenue Costs Labor Equipment leas B-YOU Annual Income Statement Rent Supplies Officers' salaries Other costs Total costs Operating profit (loss) Problem 1-45 (Algo) Part a 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. $ 580,000 260,000 46,000 35,000 36,000 160,000 26,000 $ 563,000 $ 17,000 Required: a. What are the differential costs that would be incurred as a result of taking the contract? Differential Cost
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). Item Sales revenue Costs Labor Equipment leas B-YOU Annual Income Statement Rent Supplies Officers' salaries Other costs Total costs Operating profit (loss) Problem 1-45 (Algo) Part a 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. $ 580,000 260,000 46,000 35,000 36,000 160,000 26,000 $ 563,000 $ 17,000 Required: a. What are the differential costs that would be incurred as a result of taking the contract? Differential Cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A-6
![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).
Item
Sales revenue
Costs
B-YOU
Annual Income Statement
Labor
Equipment lease
Rent
Supplies
Officers' salaries
Other costs
Total costs
Operating profit (loss)
Problem 1-45 (Algo) Part a
Total costs
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.
$ 580,000
260,000
46,000
35,000
36,000
160,000
Required:
a. What are the differential costs that would be incurred as a result of taking the contract?
26,000
$ 563,000
$ 17,000
Differential
Cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7e1f74b8-f124-44d2-bf61-7e8f2ecba9e0%2F33306368-4731-4a59-a31f-d38bc5c55c72%2Fg9ttyy_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).
Item
Sales revenue
Costs
B-YOU
Annual Income Statement
Labor
Equipment lease
Rent
Supplies
Officers' salaries
Other costs
Total costs
Operating profit (loss)
Problem 1-45 (Algo) Part a
Total costs
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.
$ 580,000
260,000
46,000
35,000
36,000
160,000
Required:
a. What are the differential costs that would be incurred as a result of taking the contract?
26,000
$ 563,000
$ 17,000
Differential
Cost
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