Addison Accounting LLP has the following financial information for its two primary business lines for the current year: Addison is considering dropping the Auditing business line since it has been reporting an operating losses for the past 3 years. If it eliminated the Auditing, half of the fixed costs cannot be avoided since they are allocated fixed costs of the entire firm. Should Addison drop the Auditing business line? Show supporting computations.

Question

Addison Accounting LLP has the following financial information for its two primary business lines for the current year:  Addison is considering dropping the Auditing business line since it has been reporting an operating losses for the past 3 years. If it eliminated the Auditing, half of the fixed costs cannot be avoided since they are allocated fixed costs of the entire firm. Should Addison drop the Auditing business line? Show supporting computations.

Quizplus · Accepted Answer

The Answer of Addison Accounting LLP has the following financial information for its two primary business lines for the current year:  Addison is considering dropping the Auditing business line since it has been reporting an operating losses for the past 3 years. If it eliminated the Auditing, half of the fixed costs cannot be avoided since they are allocated fixed costs of the entire firm. Should Addison drop the Auditing business line? Show supporting computations.

Addison Accounting LLP Has the Following Financial Information for Its