Reference no: EM132526952
Golden Age operates three retirement homes and expects the following results next year:
Oaks Pines Elms Total
Revenue $100,000 $150,000 $180,000 $430,000
Variable Costs $45,000 $60,000 $60,000 $165,000
Contribution Margin $55,000 $90,000 $120,000 $265,000
Fixed Costs $60,000 $40,000 $60,000 $160,000
Income $-5,000 $50,000 $60,000 $105,000
Question 1: Suppose $25,000 of the fixed costs are avoidable. What will be the effect on total profit, if The Oaks closes down?
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