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Guanabacoa is a catering business. It currently serves two institutions; Oso Blanco and Santa Marta. The following information is about Guanabacoa's revenues and costs for
Guanabacoa is a catering business. It currently serves two institutions; Oso Blanco and Santa Marta. The following information is about Guanabacoa's revenues and costs for the previous year. Use differential analysis to determine if the Oso Blanco account should be discontinued:
Oso Blanco Santa Marta
Revenue $230 $480
Operating costs
Cost of service (variable) 212 250
Fixed costs 20 25
Total operating costs $232 $275
Operating Profits $(2) $205
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