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Calculate the impact of the exhibit on company profit

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Reference no: EM133187272

Question - Marx 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 $15,040 for space. At the show, Marx 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 $40,060 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue

$212,502

Less:

Design supplies

$17,876

Salary of Samantha Spade (owner)

82,147

Salary of Kim Bridesdale (full-time employee)

56,496

Rent

18,867

Utilities

7,120

Depreciation of office equipment

3,820

Printing of advertising materials

797

Advertising in Middleton Journal

3,060

Travel expenses other than depreciation of autos

3,260

Depreciation of company cars

10,040

203,483

Net income

$9,019

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?

Reference no: EM133187272

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