art 4 liff and Bassman is a public accounting firm that offers audit, tax, and...
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art 4 liff and Bassman is a public accounting firm that offers audit, tax, and consulting ervices. The firm is concerned about the profitability of its consulting business and is onsidering dropping. If it does so, it could do more tax work. It would lose all consulting venues but would save all variable costs and onsulting. Ta ith auditing would not be affected. egmented income statements for these three product lines follow 50% of the fixed costs associated with x revenues are expected to increase by 45%, but the fixed costs associated ConsultingTax Auditing Sales 300,000 $500,000$600,000 250,000 | 300,000 1 3500001 Variable costs 250,000 80,000 $ 170,000 200,000 60.000 $ 140,000 | Contribution margin Fixed costs allocated 50,000 50.000.1 $0 | Operating profit (loss) equired: k? S Should Cliff& Bassman drop the consulting line without increasing tax wor ur computation. hould Cliff & Bassman drop the consulting line and increase tax work? Sh putation
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