70.2K
Verified Solution
Link Copied!
After reviewing financial reports of her company's daycare service, Kara determines it should be closed due to an almost $40,000 loss.
Revenues $120,000
Variable costs 45,000
Traceable (avoidable) fixed costs 70,000
Allocated corporate overhead 45,000
1. Do you agree? Compute the net impact on Net Income of closing. Note a loss as a negative number, a gain as a positive number.
2. What amount if any should she ignore? State costs as negative, revenue as positive.
Answer & Explanation
Solved by verified expert
