The accounting firm of Pie and Lowell is examining its client base to determine how profitable its regular clients are. Its analysis indicates that Chico, Inc. paid $116,000 in fees last year, but cost the firm $124,000 ($106,000 in billable labor, supplies, and copying, and $18,000 in allocated common fixed costs). If Pie and Lowell dropped Chico, Inc. as a client, and all fixed costs are unavoidable, how would profit be affected?
A. Increase $8,000
B. Decrease $116,000
C. Decrease $10,000
D. $0
Answer: C
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