Final answer:
The amount of income from operations is found by subtracting variable costs from revenues. In the given scenario, the income from operations would be $5,000, calculated as $20,000 in revenues minus $15,000 in variable costs.
Step-by-step explanation:
The amount of income from operations is a calculation used to determine the profit a business has made from its core business activities, excluding other sources of revenue and expenses such as investments, taxes, or interest. In the scenario provided, the center earns revenues of $20,000 and has variable costs of $15,000. To calculate the income from operations, we subtract the variable costs from the revenues.
Income from Operations = Revenues - Variable Costs
Therefore, Income from Operations = $20,000 - $15,000 = $5,000.
In terms of whether the center should continue in business, this decision would be based on other factors apart from just the income from operations, such as fixed costs, potential for growth, market conditions, and strategic objectives. However, purely based on the information provided, the center generates a positive income from operations, which is an encouraging sign for the continuity of the business.