Henderson Designs provides basic interiordesign services in a small town in the RockyMountain area. Lately, the growth in thebusiness has slowed considerably and themanagers have been looking at newservices that might improve their prospects.The sales manager has suggested thatadding some landscape design serviceswould be a nice complement to theirexisting offerings. The manager put theanalysis together and then suddenly quit.You have been asked to reconstruct theanalysis. The last known spreadsheet withthe analysis is shown as follows. You recallthat, in the last meeting, the sales managerestimated that Henderson would probablyhave to hire some additional employees todo the extra work. The analysis included anestimate that the new service would addabout $21,900 to the annual labor costs. Required:Complete the below table by filling in the blank cells.Note: Enter all amounts as positive values.Sales revenueCostsEquipment leaseLaborRentDepreciationUtilitiesOtherTotal costsOperating profitStatus Quo:CurrentServices$Henderson DesignsProjected Income StatementFor the Year$104,00024,00059,00024,00099,500% Increase(Decrease)Alternative:EnhancedServices% $ 487,20010 % $%20 %5 %114,40094,90027,000Difference$10,40025,900

Income statement: It is a financial statement used to calculate the net income generated by a…

Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales revenue Costs Equipment lease Labor Rent Depreciation Utilities Other Total costs Operating profit Henderson Designs Projected Income Statement For the Year Status Quo: Current Services $ 104,000 $ 24,000 59,000 24,000 99,500 % Increase (Decrease) % Alternative: Enhanced Services $ 487,200 10 % $ % 20 % 5 % 114,400 94,900 27,000 Difference $ 10,400 25,900

Required: Complete the below table by filling in the blank cells. Note: Enter all amounts as positive values. Sales revenue Costs Equipment lease Labor Rent Depreciation Utilities Other Total costs Operating profit Henderson Designs Projected Income Statement For the Year Status Quo: Current Services $ 104,000 $ 24,000 59,000 24,000 99,500 % Increase (Decrease) % Alternative: Enhanced Services $ 487,200 10 % $ % 20 % 5 % 114,400 94,900 27,000 Difference $ 10,400 25,900

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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