Bulstrode and Parker are in partnership making ornate cocktail cabinets with gold inlays.Each year they are able to produce and sell 25 cabinets with the assistance of several part-time staff who can be employed flexibly.There is a customer waiting list for the cabinets. Each cabinet sells for £12 000, and variable material and labour costs total £6500 per cabinet.The business's fixed costs are £86 000.
The small workshop next to the business's existing premises has now become available.If the partners take it on, production could be increased by 20%, but there would be additional fixed costs of £35 000.
What is the incremental profit or loss that could be earned from the proposed expansion?

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The Answer of Bulstrode and Parker are in partnership making ornate cocktail cabinets with gold inlays.Each year they are able to produce and sell 25 cabinets with the assistance of several part-time staff who can be employed flexibly.There is a customer waiting list for the cabinets. Each cabinet sells for £12 000, and variable material and labour costs total £6500 per cabinet.The business's fixed costs are £86 000.
The small workshop next to the business's existing premises has now become available.If the partners take it on, production could be increased by 20%, but there would be additional fixed costs of £35 000.
What is the incremental profit or loss that could be earned from the proposed expansion?

Bulstrode and Parker Are in Partnership Making Ornate Cocktail Cabinets