Reference no: EM132975753

Kennel Interiors, 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 Middleton Home and Garden Expo. The exhibit will cost the company $15,080 for space. At the show, Kennel Interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs.

The company estimates that revenue will increase by $40,250 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue$214,366

Less:Design supplies $18,022

Salary of Samantha Spade (owner) 82,404

Salary of Kim Bridesdale (full-time employee) 55,845

Rent 18,958

Utilities 7,100

Depreciation of office equipment 4,210

Printing of advertising materials 826

Advertising in Middleton Journal 3,000

Travel expenses other than depreciation of autos 3,170

Depreciation of company cars 10,590

204,125

Net income$10,241

Problem 1: Assume that design supplies and travel other than depreciation are variable costs. Calculate the impact of the exhibit on company profit.