ACCT 2102-Infinity Designs, an interior design company,

  

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
Less:
Design supplies (variable cost)
Salary of Samantha Spade (owner)
Salary of Kim Bridesdale (full time employee)
Rent
Utilities
Depreciation of office equipment
Printing of advertising materials
Advertising in Middleton Journal
Travel expenses other than depreciation of
autos (variable cost)
Depreciation of company cars
Required:
Calculate the impact of the exhibit on company profit. $201,000
$16,500
80,000
55,000
18,000
6,000
3,600
700
2,500
$2,800
9,000