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Paul Cable source sells cables and below is the income statement currently. Current Alternative Difference...

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Accounting

Paul Cable source sells cables and below is the income statement currently. Current Alternative Difference Sales $205,000 Costs: Cables $50,000 Labor $16,000 Utilities $65,000 Rent $15,000 Other $32,000 Managers salary $32,000 Total Costs $210,000 Operating Profits (Losses) -$5,000 The President of the company is considering adding Computer Supplies to the menu. Sales will be expected to increase by $83,600 The cost of computer supplies would be $22,000. Labor Costs would increase 23%, utilites 4%, and other costs would increase by 3%. The current manager would run the operation with a 4% raise. Rent would go up 3%. a. Prepare a differential analysis of the decision to add Computer Supplies. (similar to the one on page 13 in Chapter 1). Would it be profitable to add the Computer Supplies? b. What non cost issues may the company have?

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