Jerry Mounds,controller for Pearl Distributing,has prepared the following financial information for the most recent period showing profitability the of its three departments :
The factory rent of $3,200 assigned to Department C is avoidable if the department is eliminated.Depreciation will remain unchanged if a department is dropped.Discontinuing Department C will reduce the utilities by $600.

Required:

Prepare an analysis showing whether Department C should be eliminated.

Question

Jerry Mounds,controller for Pearl Distributing,has prepared the following financial information for the most recent period showing profitability the of its three departments :
  The factory rent of $3,200 assigned to Department C is avoidable if the department is eliminated.Depreciation will remain unchanged if a department is dropped.Discontinuing Department C will reduce the utilities by $600.

Required:

Prepare an analysis showing whether Department C should be eliminated.

Quizplus · Accepted Answer

The Answer of Jerry Mounds,controller for Pearl Distributing,has prepared the following financial information for the most recent period showing profitability the of its three departments :
  The factory rent of $3,200 assigned to Department C is avoidable if the department is eliminated.Depreciation will remain unchanged if a department is dropped.Discontinuing Department C will reduce the utilities by $600.

Required:

Prepare an analysis showing whether Department C should be eliminated.

Jerry Mounds,controller for Pearl Distributing,has Prepared the Following Financial Information