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The Architect Firm of Mike is examining its client base to determine how profitable its regular clients are. Its analysis indicates that Charlie, Inc. paid
The Architect Firm of Mike is examining its client base to determine how profitable its regular clients are. Its analysis indicates that Charlie, Inc. paid $160,000 in fees last year, but cost the firm $181,900 ($132,800 in billable labor, supplies, and copying, and $49,100 in allocated common fixed costs). If Mike dropped Charlie, Inc. as a client, and all fixed costs are unavoidable, how would profit be affected?
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