*Local administrative expenses are the administrative expenses incurred at the check processing centers. ↑Regional administrative expenses are allocated to the check processing centers based on sales.
↑Corporate administrative expenses are charged to segments of the company such as the Rocky Mountain Region and the check processing centers at the rate of 9.5% of their sales.
Upon seeing this report, Ms. Romeros summoned John Littlebear for an explanation.
What’s the story on Clayton? It didn’t have a loss the previous year did it?
Littlebear: No, the Clayton facility has had a nice profit every year since it was opened six years ago, but Clayton lost a big contract this year.
One of our national competitors entered the local market and bid very aggressively on the contract. We couldn’t afford to meet the bid.