Problem $1-44($Algo$)$ Cost Data for Managerlal Purposes $($LO $1-3)$

Kendall & Floyd provides landscaping services in Eastvale. Sara Kendall, the owner, is concerned about the recent losses the company

has incurred and is considering dropping its yard cleanup services, which she feels are marginal to the company's business. She

estimates that doing so will result in lost revenues of $$45,000$ per year $($including the lost tree business from customers who use the

company for both services$).$ The present manager will continue to supervise the tree services with no reduction in salary. Without the

yard cleanup business, Sara estimates that the company will save $14$ percent of the equipment leases, labor, and other costs. She also

expects to save $25$ percent on rent and utilities. The income statement before dropping the yard cleanup service follows.

Requlred :

$.$ Prepare a report of the differential costs and revenues if the yard cleanup service is discontinued.

b$.$ Should Sara discontinue the yard cleanup service?

Complete this question by entering your answers in the tabs below.

Prepare a report of the differential costs and revenues if the yard cleanup service is discontinued.

Note: Enter loss amount with minus sign.