The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $145,000. Because of this information, in the short run, the Brookside Racquet Club should?

Question

Business

Mora

24 November, 21:12

The accountants hired by the Brookside Racquet Club have determined total fixed cost to be $75,000, total variable cost to be $130,000, and total revenue to be $145,000. Because of this information, in the short run, the Brookside Racquet Club should?

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Answers (1)

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Aria Hogan · Answer 1

Should Remain Open

Explanation:

The Brookside Raquet club should remain open as the company in making profits and contribution margin is positive

Contribution margin = Sales Revenue - Variable Cost

Contribution Margin = $145,000 - $130,000

Contribution Margin = $15,000

Fixed costs stays the same regardless of the number of units sold and it becomes a smaller percentage of each unit's cost as the number of units sold increases.