Toms Tax Services is a small accounting firm that offers tax services to small businesses and individuals. One of Toms
If Tom loses the cafÃ©s business, he can save $60,000 in labor costs. Tom also estimates that he can reduce equipment leases by about 10 percent, supplies by 5 percent, and other costs by 15 percent.
a. What are the differential costs that would be saved as a result of losing the cafÃ©s business?
b. Tom currently collects about $75,000 in fees from the cafÃ©. How much could he offer to reduce the fees and still not lose money on this client?
c. What considerations, other than costs, are necessary before making thisdecision?
This problem has been solved!
Step by Step Answer: