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An insurance company has the following profitability analysis of its services: Life Insurance Auto Insurance Home Insurance Revenues $5,000,000 $10,000,000 $3,000,000 Commissions (1,000,000) (2,000,000) (600,000)
An insurance company has the following profitability analysis of its services: Life Insurance Auto Insurance Home Insurance Revenues $5,000,000 $10,000,000 $3,000,000 Commissions (1,000,000) (2,000,000) (600,000) Payments (3,000,000) (7,300,000) (2,000,000) Fixed Cost (500,000) (500,000) (500,000) Profit $500,000 $200,000 ($100,000) The fixed costs are distributed equally among the services and are not avoidable if one of the services is dropped
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