Infinity Designs, an interior design company, has experienced a drop in business due to an increase in
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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) | $2,800 | |||
Depreciation of company cars | 9,000 | |||
Required: | ||||
Calculate the impact of the exhibit on company profit. |
Round to two decimal places.
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