Analyzing the Impact of Exhibiting at Middleton Home and Garden

School: Florida Institute of Technology - Course: BUS 5431 - Subject: Accounting

Exercise 7-4 Incremental Analysis Exhibit cost $15,000 Estimated increase in revenue over the next year 40,000 For the previous year, profit was as follows: Revenue$212,500 Less: Design supplies$18,000 Salary of Samantha Spade (owner)82,000 Salary of Kim Bridesdale (full time employee)56,000 Rent19,000 Utilities7,000 Depreciation of office equipment4,000 Printing of advertising materials800 3,000 Travel expenses other than depreciation of autos3,000 Depreciation of company cars10,000202,800 Net income$9,700 Required Calculate the impact of the exhibit on company profit. Variable cost rates based on revenue: Design supplies Travel expenses Increase in revenue Changes in costs: *Increase in profit *If formulas include proper cell references, no rounding will occur to the increases causing the calculations to be more accurate. Should the company exhibit at the home show?Rustic 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. At the show, Rustic Interiors 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 following are expected as a result of the exhibit: Advertising inMiddleton Journal

What-if? Consider the following after you have completed the requirements of E7-4. At what cost will Rustic Interiors consider the Middleton Home and Garden Expo to be too expensive? Explain.