FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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financial account
Transcribed Image Text:Allison's Auto Art is a company that applies pinstripes to vehicles.
Allison's cost for a basic 1 - color pinstriping job is $35, and she
charges $95 for this service. For a total price of $175, Allison will apply
a fancier 3 - color pinstripe application to an automobile, a service that
adds an additional $40 to the total cost of the package. Should Allison
continue to offer the 3 - color pinstripe application?
A Yes, but only if she lowers the price of the 1 - color application
B No, her marginal benefit is less than her marginal cost
C Yes, she still makes a profit by selling the 3 - color application.
D More information is needed for Allison to make this decision.
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