Markoff Landscaping Services provides services to 3 big accounts. The allocated fixed costs shown below are incurred at the CORPORATE LEVEL and are not directly traceable OR controllable by the customers. These are allocated based on SALES LEVEL and they will continue regardless of whether any customers are eliminated. As you can see, the Brumfeld account is showing a lost of $15,000. Question: Should the Brumfeld account be dropped? Yes or no... and how much better off would the company be if they followed your advice? Sales revenue Variable costs Contribution margin Direct fixed costs Allocated fixed costs Profit (loss) Customers Brumfield Hodges 200,000 $ 500,000 $ 170,000 380,000 $ 30,000 $ 120,000 $ 25,000 40,000 20.000 50,000 $ (15.000) $ 30.000 $ Orth 300,000 $ 200.000 100,000 $ 30,000 30.000 40.000 $ Total 1,000,000 750,000 250,000 95,000 100.000 55.000