The Accounting Firm of Pie and Lowell Is Examining Its

question 32

Multiple Choice

The accounting firm of Pie and Lowell is examining its client base to determine how profitable its regular clients are.Its analysis indicates that Chico,Inc.paid $116,000 in fees last year,but cost the firm $124,000 ($106,000 in billable labor,supplies,and copying,and $18,000 in allocated common fixed costs) .If Pie and Lowell dropped Chico,Inc.as a client,and all fixed costs are unavoidable,how would profit be affected?

• A)$0
• B)Increase $8,000
• C)Decrease $10,000
• D)Decrease $116,000

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Definitions:

Intentional Torts

Intentional torts are wrongful actions performed intentionally by a person against another person or property, resulting in harm.

Intentional

Intentional refers to actions done with purpose or deliberate intent, often in the context of torts or criminal law, where the mindset of the actor plays a key role.

Consequences

The outcomes or effects that result from a particular action or condition.

Economic Injury

Financial harm or damage suffered by an individual, entity, or economy, often due to external factors or actions.