.6.2: Bradley Rehabilitation Clinic Case 10.2: atribution Margin Contribu Preparing a contribution margin statement and determining for a decision about closing Key concept: Pre relevant for a de he Bradley Rehal bundley Rehabilitation Clinic (BRC) provides rehabilitation services for patience h a variety of temporary and chronic conditions. BRC is a wholly owned sub with a variety of tempora sidiary of McKee Hospital. BRC is currently at $100 each. The stations. Depreciation is currently performing 20,000 rehabilitation sessions per year, which h The clinic contains 20 recently purchased, electronically controlled ex Depreciation on these exercise stations totals $100,000 per year. ed operating costs (other than exercise station depreciation) total $500,000 oble costs (such as labor and utilities) are $60 per training session. Kee Hospital allocates $400,000 per year of its overhead costs to Bro. The following loss statement reflects results for the current year: year. Variable costs $2,000,000 (20,000 x $100) Revenues Less: Variable expenses (20,000 x $60) Depreciation expense Other fixed expenses Allocated McKee Hospital overhead expense $1,200,000 $100,000 $500,000 $400,000 $2,200,000 Total expenses $200,000 Net loss McKee Hospital financial analysts have strongly suggested to upper management that BRC be closed due to its losses. As BRC's manager, you disagree with the suggestion about closing but are unsure how best to respond. Assignments 1. Prepare an income statement in a conti a contribution margin format or close it. Support 2. Make a recommendation about whether to continue BRC or close it. Su your recommendation with a well-reasoned argument