In order to determine which expense must be cut significantly to trim [tex]$10,000 from the monthly warehouse expenses, we need to evaluate each of the eligible expenses. We are not allowed to reduce costs for HVAC, refrigeration, and lights, so we focus on the following expenses:
1. Water
2. Copiers
3. Computers
Let's list the given expenses:
- Water: $[/tex]5,000
- Copiers: [tex]$15,000
- Computers: $[/tex]20,000
We need to identify which of these expenses can absorb a reduction of [tex]$10,000 on its own.
1. Water:
Cost: $[/tex]5,000
- The Water expense is only [tex]$5,000, which is less than the required reduction of $[/tex]10,000. Therefore, it cannot be reduced significantly by [tex]$10,000.
2. Copiers:
Cost: $[/tex]15,000
- The Copiers expense is [tex]$15,000, which is greater than the required reduction of $[/tex]10,000. Thus, it can be reduced by [tex]$10,000.
3. Computers:
Cost: $[/tex]20,000
- The Computers expense is [tex]$20,000, which is also greater than the required reduction of $[/tex]10,000. This expense can be reduced by [tex]$10,000 as well.
To determine which of the eligible expenses must be cut significantly, we note that we are looking for the first expense that is larger than or equal to $[/tex]10,000. Reviewing our list:
1. Computers: [tex]$20,000 (sufficient to cut $[/tex]10,000)
2. Copiers: [tex]$15,000 (sufficient to cut $[/tex]10,000)
3. Water: [tex]$5,000 (insufficient to cut $[/tex]10,000)
Among these expenses, the highest one that can be cut significantly on its own is:
Answer: C. Computers
