Infinity Designs, an interior design company, has experienced a drop in business due to an...
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Infinity Designs, 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 Home and Garden Expo. The exhibit will cost the company $12,000 for space. At the show, Infinity Designs will present a slide show on a PC, pass out brochures that are printed previously, (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $36,000 over the next year as a result of the exhibit. For the previous year, profit was as follows: Revenue $201,000 Less: Design supplies (variable cost) $17,000, Salary of Samantha Spade (owner) $80,000, Salary of Kim Bridesdale (full-time employee) $55,000, Rent $18,000, Utilities $6,000, Depreciation of office equipment $3,600, Printing of advertising materials $700, Advertising in Middleton Journal $2,500, Travel expenses other than the depreciation of autos (variable cost) $2,400, Depreciation of company cars $9,000 Calculate the impact of the exhibit on company profit.
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