BRADLEY REHABILITATION CLINIC CONTRIBUTION MARGIN The Bradley Rehabiliation Clinic (BRC) provides rehabiliation services for patients with a variety of temporary and chronic conditions. BRC is a wholly owned subsidary of McKee Hospital. BRC is currently performing 20,000 rehabiliation sessions per year, which it bills at $100 each. Depreciation on these exercise stations total $100,000 per year. Fixed opderating costs (other than exercise station depreciation) total $500,000 per year. Variable costs (such as labor and utilities) are $60 per training sessions. McKee Hopsital allocates $400,00 per year of its overhead to cost to RBC. The following loss statement relects results for the current year:
REVENUE	($20,000 x $100)		$2,000,000
LESS
	Variable Expense (20,000 x $60)	$1,200,000
	Depreciation Expense	$100,000
	Other fixed expense	$500,000
	Allocated McKee hospital overhead expenses	$400,000
TOTAL EXPENSES			$2,200,000
PROFIT (LOSS)			$ (200,000)
ASSIGNMENT AND QUESTIONS -*Please provide formulas for answers as info needs to be transferred to an excel document*
McKee Hospital financial analyst have strongly suggested to upper management that BRC be closed due to its losses. As BRC's manager, you disagree with the suggestion about closting but are unsure how best to respond.
1. Construct a contribution margin income statement
2. Make a recommendation about whether to continue BRC or close it. Support your recommendation with a well-reasoned argument.