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Case $2-60($Algo$)$ Understanding Cost Concepts $($LO $2-7,2-8,2-10)$

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You just started a summer internship with the successful management consulting firm of Brooks & Angelou, which specializes in social and environmental issues. Your first day on the job was a busy one, as the following problems were presented to you.

Required:

Supply the requested comments in each of the following independent situations.

Case $2-60($Algo$)$ Part $3$: A local PBS station has decided to produce a TV series...

$3.$ A local PBS station has decided to produce a TV series on animal welfare. The producer of the TV series, Lakeisha Willis, is currently attempting to analyze feasibility of the projected costs for the series. Willis intends to send a TV production crew on location to shoot various agricultural and food processing scenes as they occur. If the four$-$week series is shown in the $8$:$00-9$:$00$ P$.$M$.$ prime$-$time slot, the station will have to cancel a wildlife show that is currently scheduled. Management projects a $10$ percent viewing audience for the wildlife show, and each $1$ percent is expected to bring in donations of $$12,000.$ In contrast, the animal welfare show is expected to be watched by $15$ percent of the viewing audience. However, each $1$ percent of the viewership will likely generate only $$5,000$ in donations. If the wildlife show is canceled, it can be sold to network television for $$45,000.$

Which show should management choose?

Management should be indifferent between the two shows.

Management should choose the wildlife show.

Management should choose the manufacturing show.