Reference no: EM133014330

Question - Duffy Dog 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 $15,150 for space. At the show, Duffy Dog 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 $39,990 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue $214,624

Less: Design supplies $18,059

Salary of Samantha Spade (owner) 82,377

Salary of Kim Bridesdale (full-time employee) 55,607

Rent 18,822

Utilities 6,840

Depreciation of office equipment 3,860

Printing of advertising materials 843

Advertising in Middleton Journal 2,970

Travel expenses other than depreciation of autos 2,970

Depreciation of company cars 10,850 203,198

Net income $11,426

Assume that design supplies and travel other than depreciation are variable costs.

Required -

1. Calculate the impact of the exhibit on company profit.

2. Should the company exhibit at the home show?