Reference no: EM132939959

Question - Runner 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 $14,870 for space. At the show, Runner 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 $40,270 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue $212,391

Less: Design supplies $17,919

Salary of Samantha Spade (owner) 82,415

Salary of Kim Bridesdale (full-time employee) 55,977

Rent 19,156

Utilities 7,540

Depreciation of office equipment 3,940

Printing of advertising materials 731

Advertising in Middleton Journal 3,100

Travel expenses other than depreciation of autos 2,910

Depreciation of company cars 9,800 203,488

Net income $8,903

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?