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How do calculate the impact of the exhibit on company profit

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Reference no: EM132746503

Penny Worth 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 $14,990 for space. At the show, Penny Worth 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 $39,930 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue $211,674
Less: Design supplies $18,043
Salary of Samantha Spade (owner) $81,651
Salary of Kim Bridesdale (full-time employee) $56,129
Rent $19,152
Utilities $6,730
Depreciation of office equipment $3,870
Printing of advertising materials $803
Advertising in Middleton Journal $3,290
Travel expenses other than depreciation of autos $3,120
Depreciation of company cars $10,760 203,548

Net income $8,126

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

Problem 1: Calculate the impact of the exhibit on company profit. (Round intermediate calculations to 4 decimal places, e.g. 0.3215 and final answer to 0 decimal places, e.g. 125.)

Problem 2:  Company profit will increase or decrease??? AND by how much_________(show dollar amount)?

Reference no: EM132746503

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