Suppose that hiring an employee who is a bad fit for the company results in an error cost of $400, but failing to hire a good employee results in an error cost of $400 to the company. Although it is impossible to tell in advance whether an employee is a good fit, assume that the probability that an applicant is a “good fit” is 0.2, while the probability that an applicant is a “bad fit” is 1−0.2=0.8 . Hiring an applicant who is a good fit, as well as not hiring an applicant who is a bad fit, results in no error cost to the company.

He moto hotel opened for business on may 1, 2017. here is its trial balance before adjustment on may 31. moto hotel trial balance may 31, 2017 debit credit cash $ 2,283 supplies 2,600 prepaid insurance 1,800 land 14,783 buildings 72,400 equipment 16,800 accounts payable $ 4,483 unearned rent revenue 3,300 mortgage payable 38,400 common stock 59,783 rent revenue 9,000 salaries and wages expense 3,000 utilities expense 800 advertising expense 500 $114,966 $114,966 other data: 1. insurance expires at the rate of $360 per month. 2. a count of supplies shows $1,050 of unused supplies on may 31. 3. (a) annual depreciation is $2,760 on the building. (b) annual depreciation is $2,160 on equipment. 4. the mortgage interest rate is 5%. (the mortgage was taken out on may 1.) 5. unearned rent of $2,580 has been earned. 6. salaries of $810 are accrued and unpaid at may 31