There is a Part B and C to this question... but I am having so much trouble with Part A I cant get there. Please
help. And can you work it out by chance because I have 10 more questions very similar to this with Part A B and C. Thank you!!
Morris Inc. is a management consulting firm that specializes in management training programs. Tackle Manufacturing Inc. has approached Morris to contract for management training for a one-year period. Last year's income statement for Morris is as follows:
Sales Revenue $360,000 Costs: Labor$120,000 Equipment Lease 12,000 Rent 24,000 Utilities 8,400 Supplies 23,600 Other Costs 14,400 Manager's Salary 80,000 Total Costs 282,400 Operating Profit (Loss) $77,600
To satisfy the Tackle contract, another part-time trainer will need to be hired at $42,000. Supplies will increase by 12% and other costs will increase by 15%. In addition, new equipment will need to be leased at a cost of $2,500.
a. What are the differential costs that would be incurred if the Tackle contract is signed?