Amy owns interests in a beauty salon, a natural foods store, and a tanning salon

Question

Amy owns interests in a beauty salon, a natural foods store, and a tanning salon. Several full-time employees work at each of the enterprises. As of the end of November of the current year, Amy has worked 180 hours in the beauty salon, 220 hours at the natural foods store, and 80 hours at the tanning salon. These three ventures collectively will produce income. Amy also owns one other passive activity that is producing a loss (a limited partnership in which she has reported no participation). How should Amy plan her activities for the remainder of the year?

Explanation / Answer

Amy should check following to decided on how to plan her activities for the remainder of the year-

1) She should clearly define her objective.One of the and most important objective is any business is maximising proits.

2) Once the objective is maximising profit. Amy should calculate profit per hour of time spent on each activity. She shoud devote time to that activity which is generating maximum profit per hour.

There can be other objectives as well for continuing a activity such as increasing customer base, maintaining public relation etc. In this case the decision making will depend of othe factors and not profit.

Here in this question if the data regarding incoem and cost is given then proper decision on time devotion can be taken.

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