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Which department should be closed

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Reference no: EM133116997

Question - Howard Enterprises, which has three departments, recently reported the following results:

A

B

C

Sales revenue

$18,200

$49,400

$62,400

Less: Operating costs

$17,500

$64,500

$80,200

Operating income (loss)

$700

$(15,100)

$(17,800)

The company incurred variable operating costs as well as $39,000 of fixed operating costs. The $39,000 amount was allocated to A, B, and C on the basis of sales revenue and is included in the cost figures noted above. Which department(s), if any, should be closed if none of the fixed operating costs can be avoided?

Reference no: EM133116997

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