What is the profitability of the remaining services if all, Ask an Expert

Accounting

An insurance company has the following profitability analysis of the services.

Life Insurance Auto Insurance Home Insurance
Revenues $5,000,000 $10,000,000 $3,000,000
Commissions (1,000,000) (2,000,000) (600,000)
Payments (3,000,000) (7,300,000) (2,000,000)
Fixed Cost (500,000) (500,000) (500,000)
Profit $500,000 $200,000 ($100,000)

The fixed costs are distributed equally among the services and are not avoidable if one of services is dropped.

What is the profitability of the remaining services if all services with losses are dropped? Explain fully with spreadsheet illustration and text discussion.

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9449130

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - the adjusted trial balance of cheyenne company

Question - The adjusted trial balance of Cheyenne Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue $752,300, Delivery Expense $13,020, Sales Returns and ...

Question - jabiru corporation purchased a 20 interest in

Question - Jabiru Corporation purchased a 20% interest in Fish Company common stock on January 1, 2002 for $300,000. This investment was accounted for using the complete equity method and the correct balance in the Inves ...

Question - mark and patricia report adjusted gross income

Question - Mark and Patricia report adjusted gross income of $410,000 and itemized deductions of $31,000 for the interest on their home acquisition mortgage (principal amount of $890,000 acquired in 2015), $14,000 in sta ...

Question - teresa is an accomplished actress during the

Question - Teresa is an accomplished actress. During the summer, she rented a vacant store to stage productions of four plays, using the local townspeople as actors and stagehands. She sold $24,000 of tickets to the vari ...

Question - community health center chc is considering

Question - Community Health Center (CHC) is considering spending fifty thousand dollars on a blood analyzer. The annual cash profits from the machine will be seven thousand dollars for each of the seven years of its usef ...

Question - marvin services corporation had the following

Question - Marvin Services Corporation had the following accounts and balances: Accounts payable $12,000 Equipment $14,000Accounts receivable 2,000 Land14,000 Buildings? Unearned service revenue 4,000 Cash 6,000 Total st ...

Accounting question - a comparative balance sheet for

Accounting Question - A comparative balance sheet for Halper Corporation appears on the next page, and the statement of cash flows form follows. Explain below, why you must convert from an accrual basis of accounting to ...

Question - the will of the decedent established a trust for

Question - The will of the decedent established a trust for the benefit of his wife and two sons. The trust states that the trustee shall pay to the widow $25,000 a year and $12,500 a year to each of his two sons. There ...

Question as the first step of your final project select

Question: As the first step of your final project, select three companies to evaluate for determining which is in the best financial health and would, therefore, be the most profitable investment. • What considerations m ...

Question hg wells once said statistical thinking will one

Question: H.G. Wells once said, "Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write!" What part will statistics play in the Global Society? Take a position on whe ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert