B-You is a consulting firm that works with managers to improve their interpersonal skills. Recently, a representative of ahigh-tech research firm approached B-You's owner with an offer to contract for one year with B-You to improve theinterpersonal skills of a newly hired manager. B-You reported the following costs and revenues during the past year(before the proposed contract).Sales revenueCostsLaborEquipment leaseB-YOUAnnual Income StatementRentSuppliesOfficers' salariesOther costsTotal costsOperating profit (loss)$ 560,000260,00042,00035,00030,000160,00020,000$ 547,000$ 13,000If B-You decides to take the contract to help the manager, it will hire a full-time consultant at $85,500. The equipmentlease will increase by 20 percent. Supplies will increase by an estimated 10 percent and other costs by 15 percent. Theexisting building has space for the new consultant. No new offices will be necessary for this work. Required:c. What considerations, other than costs, do you think are necessary before making this decision?Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correctanswer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question markwill be automatically graded as incorrect.? Whether the contract will provide for more revenues in the future.? Whether this will enable the company to get into a new, profitable line of business.? What other opportunities the company has for expanding.? Profitability of the other contracts.? Current financial position of the company.

Differential analysis is a management accounting technique in which we assess only the changes in…

What considerations, other than costs, do you think are necessary before making this decision? te: You may select more than one answer. Single click the box with the question mark to produce a check mark for a corre swer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question I be automatically graded as incorrect. ?Whether the contract will provide for more revenues in the future. ? Whether this will enable the company to get into a new, profitable line of business. ? What other opportunities the company has for expanding. ? Profitability of the other contracts. ? Current financial position of the company.

What considerations, other than costs, do you think are necessary before making this decision? te: You may select more than one answer. Single click the box with the question mark to produce a check mark for a corre swer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question I be automatically graded as incorrect. ?Whether the contract will provide for more revenues in the future. ? Whether this will enable the company to get into a new, profitable line of business. ? What other opportunities the company has for expanding. ? Profitability of the other contracts. ? Current financial position of the company.

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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