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Question - HONEY store no. SEPT26 has fallen on hard times and is about to be closed. The following figures are available for the period just ended: Sales P205,000 Cost of sales 67,900 Building occupancy costs: Rent 36,500 Utilities 15,000 Supplies used 5,600 Wages 77,700 Miscellaneous 2,400 Allocated corporate overhead 16,800 All employees except the store manager would be discharged. The manager, who earns P27,000 annually, would be transferred to store no. NOV11 in a neighboring suburb. Also, no. SEPT26s furnishings and equipment are fully depreciated and would be removed and transported to WYENNE warehouse at a cost of P2,800.
Required -
1. How much is the total irrelevant cost?
2. Should store sept26 be closed (yes/no) how much is advantage/disadvantage of your decision?
3. What is the store sept26 reported loss?
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