RS Company's western territory's forecasted income statement for the upcoming year is as follows:
RS Company's management is considering dropping the western territory. This move would be financially advantageous only if the company could eliminate $330,000 of fixed costs or more.

Question

RS Company's western territory's forecasted income statement for the upcoming year is as follows:
  RS Company's management is considering dropping the western territory. This move would be financially advantageous only if the company could eliminate $330,000 of fixed costs or more.

Quizplus · Accepted Answer

The western territory's forecasted loss is $330,000. Therefore, eliminating $330,000 or more of fixed costs would result in a break-even or profitable situation, making it financially advantageous to drop the territory.

RS Company's Western Territory's Forecasted Income Statement for the Upcoming