Reference no: EM132903615
Question - Oak 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 $14,910 for space. At the show, Oak 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 $39,790 over the next year as a result of the exhibit. For the previous year, profit was as follows:
Revenue $213,128
Less: Design supplies $18,032
Salary of Samantha Spade (owner) 81,225
Salary of Kim Bridesdale (full-time employee) 56,086
Rent 19,063
Utilities 6,570
Depreciation of office equipment 3,700
Printing of advertising materials 848
Advertising in Middleton Journal 2,730
Travel expenses other than depreciation of autos 3,190
Depreciation of company cars 10,090 201,534
Net income $11,594
Assume that design supplies and travel other than depreciation are variable costs.
Required - Calculate the impact of the exhibit on company profit.
Should the company exhibit at the home show?