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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 Costs (500,000) (500,000) (500,000)
Profit $500,000 $200,000 ($100,000)
The fixzed cost are disrtibuted equally among the services and are not avoidable if one of the services is dropped. What is the profitability of the remaining services if all services with losses are dropped
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