An Architecture Firm Currently Offers Services That Appeal to Both

question 91

Multiple Choice

An architecture firm currently offers services that appeal to both individuals and commercial clients. If the firm decides to discontinue services to individuals because of ongoing losses, which of the following costs could the company likely avoid?

• A) General corporate overhead that was allocated to individual clients.
• B) Building depreciation.
• C) Insurance.
• D) Variable operating costs.
• E) Monthly installment payments on general-purpose, computer drafting equipment.

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Definitions:

Fixed Asset Value

The net value of a company's physical assets, like buildings and machinery, after accounting for depreciation or impairment.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle, whichever is longer.

Fixed Assets

Fixed assets, also known as non-current assets, are long-term physical assets used in the operations of a business.

Taxable Income

The portion of an individual's or corporation's income used as a basis for calculating the amount of income tax owed to the government.