In general store, we have two departments - cosmetics and other goods (OG). Cosmetics had a...

 

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In general store, we have two departments - cosmetics and other goods (OG). Cosmetics had a contribution margin of $159,500, OG had a contribution margin of $23,200. Forty percent of the rent of $120,000 is charged to OG. If we close OG, we can sublet the space and receive an income of $18,000 for it. Should we close OG? In general store, we have two departments - cosmetics and other goods (OG). Cosmetics had a contribution margin of $159,500, OG had a contribution margin of $23,200. Forty percent of the rent of $120,000 is charged to OG. If we close OG, we can sublet the space and receive an income of $18,000 for it. Should we close OG?

Answer rating: 100% (QA)

To determine whether or not to close the Other Goods OG department we need to compare the financial ... View the full answer