The firm I Love Cost Accounting, Co. provides cost accounting tutoring as well as CMA test...

The firm I Love Cost Accounting, Co. provides cost accounting tutoring as well as CMA test prep classes. Cost accounting tutoring brings in $1,200,000 in revenue. CMA test prep classes bring in $4,000,000 in revenue.

Cost accounting tutoring costs the firm $2,100,000, and CMA test prep classes cost the firm $2,750,000.

If the firm drops cost accounting tutoring, then revenue for CMA test prep classes will decrease by 20%. And if the firm drops cost accounting tutoring, it cannot avoid $70,000 of the cost of providing cost accounting tutoring.

	a.	It is $100,000 LESS profitable to keep the cost accounting tutoring product than to drop it.
	b.	It is $100,000 MORE profitable to keep the cost accounting tutoring product than to drop it.
	c.	It is $30,000 MORE profitable to keep the cost accounting tutoring product than to drop it.
	d.	It is $30,000 LESS profitable to keep the cost accounting tutoring product than to drop it.

Expert Solution

ekkarill92 answered 1 year ago

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The firm I Love Cost Accounting, Co. provides cost accounting tutoring as well as CMA test...

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