The annual results of a company with three departments are as follows. Head office fixed costs have
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The annual results of a company with three departments are as follows.
Head office fixed costs have been apportioned on the basis of the respective sales of the departments and will not be reduced if any department is closed. Which action should the company take, based on these results?
A. Close department Y
B. Close departments Y and Z
C. Close department Z
D. Keep all the departments open
Transcribed Image Text:
Department to osny bronber sie bez zobubor $ ilig lan $TORBUNES 210 000 100 000 75 000 35 000 Sales Less: variable costs head office fixed costs Net profit (loss) on our 100 000 80 000 35 000 (15 000) 140.000 90 000 50 000 0
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