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{"ops":[{"insert":"Mike\u2019s shear Shop provides 4,000 hair cuts each month at average price of $5.00 per\u00a0\nhaircut. The common costs of operating the store are $12,000 per month. The business is\u00a0\nconsidering hiring a photographer who would take pictures of customers after they had their\nhair cut. The price of the photographs would be $2.50 and it estimated that 2,000 customers\u00a0\nwould purchase the service each month. The total extra cost of the photographic service is\u00a0\n1,000 + 1Q per month, where Q is the number of photographs sold.\ni) If the decision is to be based on incremental revenue and incremental cost, should the\u00a0\nservice be offered? Explain.\nii) If the decision is to be made on the basis of fully distributed costs and if the $12,000 in\u00a0\nmonthly common costs is to be apportioned based on the revenues from haircuts and\u00a0\nphoto sold each month, should the new service be offered? Why or not?\n"}]}
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