Question 1 Sparkly Clean Co. (SCC) sends workers to homes and offices to perform cleaning services for special occasions. There are four different operating locations, and one head office for the company. The costs of the head office are allocated to the operating locations using a rate of 30% of revenue. The income statement for the Sussex operating location for last year was as follows: Revenues (500 visits) Costs: Direct labour wages ($160 per visit) Rent and insurance Variable selling and administration Fixed selling and administration $200,000 $ 80,000 20,000 10,000 35,000 60,000 205,000 Allocated head office costs SCC wants to know whether this location should be dropped. Required: (6 marks) a. Identify the relevant cash flows, and calculate whether the location should be dropped from a quantitative perspective. b. Identify at least two qualitative factors that may impact this decision. Make sure to explain what the possible impact is to the company. c. Make a recommendation to management about this decision.