Question - 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:
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Revenue
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$201,000
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Less:
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Design supplies (variable cost)
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$16,500
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Salary of Samantha Spade (owner)
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80,000
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Salary of Kim Bridesdale (full time employee)
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55,000
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Rent
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18,000
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Utilities
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6,000
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Depreciation of office equipment
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3,600
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Printing of advertising materials
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700
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Advertising in Middleton Journal
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2,500
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Travel expenses other than depreciation of autos (variable cost)
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$2,400
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Depreciation of company cars
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9,000
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How do I find the impact of the exhibit on company profit?