Question

How much of the common fixed expense of $200,000 can be avoided by eliminating the bar?

A. None of it
B. Some of it
C. All of it

Answer 1

The common fixed expense can be reduced by eliminating the bar, but not all of it.

Step-by-step explanation:

In order to determine how much of the common fixed expense of $200,000 can be avoided by eliminating the bar, we need to consider the impact of removing the bar on the total expense. If the bar is eliminated, the common fixed expense can be reduced by the amount of expenses associated with running the bar. Therefore, the answer is Some of it.