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. The exhibit will cost the company $15,000 for space. At the show, Rustic 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 $60,000 over the next year as a result of the exhibit. For the previous year, profit was as follows:
| Revenue | $350,000 | ||||
| Less: | |||||
| Design supplies | $35,000 | ||||
| Salary of Samantha Spade (owner) | 130,000 | ||||
| Salary of Kim Bridesdale (full-time employee) | 58,000 | ||||
| Rent | 36,000 | ||||
| Utilities | 7,000 | ||||
| Depreciation of office equipment | 4,000 | ||||
| Printing of advertising materials | 1,000 | ||||
| Advertising in Middleton Journal | 3,000 | ||||
| Travel expenses other than depreciation of autos | 17,500 | ||||
| Depreciation of company cars | 10,000 | 301,500 | |||
| Net income | $48,500 |
Assume that design supplies and travel other than depreciation are variable costs.
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.)
| Company profit will ( decrease or increase) by $ |
Should the company exhibit at the home show?
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