| 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 stimulate business, the company is considering exhibiting 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 portfolio of previous | |||||||
| jobs. | |||||||
| The company estimates 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) | $16,500 | ||||||
| Salary of Samantha Spade (owner) | 80,000 | ||||||
| Salary of Kim Bridesdale (full time employee) | 55,000 | ||||||
| Rent | 18,000 | ||||||
| Utilities | 6,000 | ||||||
| Depreciation of office equipment | 3,600 | ||||||
| Printing of advertising materials | 700 | ||||||
| Advertising in Middleton Journal | 2,500 | ||||||
| Travel expenses other than depreciation of autos (variable cost) | $3,000 | ||||||
| Depreciation of company cars | 9,000 | ||||||
| Required: | |||||||
| Calculate the impact of the exhibit on company profit. | |||||||
