The following table shows the expansion expenses of a business. Calculate the building growth costs of expansion.
| | |
| :-------------------- | :------------------------------- |
| **Expansion Expenses** | |
| **Product Growth** | |
| Focus Groups | 40 people at $215/person |
| Inventory Expenses | 20% on $300,000 value |
| New Equipment | $245,000 |
| **Building Growth** | |
| Architect | $19,000 |
| Attorneys | $71,000 |
| Bankers | $120,000 |
Building Growth Costs = $[?]
Answer (1)
Identify the costs associated with Building Growth: Architect ($19,000), Attorneys ($71,000), and Bankers ($120,000).
Sum the individual costs to find the total Building Growth costs: $19,000 + $71,000 + $120,000.
Calculate the total Building Growth costs: $210,000.
State the final answer: $210 , 000 .
Explanation
Understanding the Problem We are given a table of expansion expenses for a business, which includes both Product Growth and Building Growth costs. Our objective is to calculate the total Building Growth costs. The Building Growth section of the table lists the expenses for the Architect, Attorneys, and Bankers.
Identifying the Costs To find the total Building Growth costs, we need to sum the individual costs for the Architect, Attorneys, and Bankers. These costs are given as:
Architect: $19,000
Attorneys: $71,000
Bankers: $120,000
Calculating Total Building Growth Costs Now, we sum these costs to find the total Building Growth costs: B u i l d in g G ro wt h C os t s = A rc hi t ec t + A tt or n eys + B ank ers B u i l d in g G ro wt h C os t s = $19 , 000 + $71 , 000 + $120 , 000 B u i l d in g G ro wt h C os t s = $210 , 000
Final Answer Therefore, the total Building Growth costs are $210,000.
Examples
Understanding business expenses is crucial for financial planning. For example, if a company plans to expand its operations, it needs to estimate the costs associated with building growth, such as architect fees, legal fees, and banking fees. Knowing these costs helps the company to budget effectively and make informed decisions about its expansion strategy. Accurately calculating these expenses ensures that the company has sufficient funds and can manage its finances responsibly during the expansion process.
