Suppose that you are the manager of a studio cafe, and you are planning to invest on a new camera and a coffee maker designed to increase the productivity of your employees and output (services) produced. Your analyst provided you the following information:Complete the table below. Current SituationProjected Sales and ProfitIncremental Revenues and CostsTotal RevenuePhp1,500,000Php1,800,000 Variable Cost575,000425,000 Direct Fixed Costs625,000700,000 Indirect Fixed Costs100,000100,000 Profit Should the new camera and coffee maker be purchased? Explain your answer based on the incremental analysis.

To find incremental revenue and cost, we subtract Current revenue and cost from Projected revenue…

Answered: Suppose that you are the manager of a…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Suppose that you are the manager of a studio cafe, and you are planning to invest on a new camera and a coffee maker designed to increase the productivity of your employees and output (services) produced. Your analyst provided you the following information:

Complete the table below.

	Current Situation	Projected Sales and Profit	Incremental Revenues and Costs
Total Revenue	Php1,500,000	Php1,800,000

Variable Cost	575,000	425,000

Direct Fixed Costs	625,000	700,000

Indirect Fixed Costs	100,000	100,000

Profit

Should the new camera and coffee maker be purchased? Explain your answer based on the incremental analysis.

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