Solution-Which department should the business shut down

Which department should the business shut down

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Reference no: EM133150017

Question - You are provided with the following information relating to four different departments in a business. The four departments are in the same building, for which the business has signed a long-term lease.

	Department A	Department B	Department C	Department D
Revenue	£100,000	£120,000	£60,000	£80,000
Costs	(£50,000)	(£80,000)	(£80,000)	(£90,000)
Profit/Loss	£50,000	£40,000	(£20,000)	(£10,000)

The business is thinking of closing one of the departments to save costs. Assume that the business's fixed costs of £100,000 are spread evenly among the cost figures of the four departments. Which department should the business shut down?

Reference no: EM133150017

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Which department should the business shut down

Reference no: EM133150017

Reference no: EM133150017

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