Royal Corporation is closing one of its divisions. The division has sales of $120,000, direct manufacturing costs

Question:

Royal is closing one of its divisions. The division has sales of $120,000, direct manufacturing costs of $100,000, and manufacturing overheads of $40,000 (75% fixed). The fixed manufacturing overhead costs will remain even if the division is closed. How will closing the division affect overall company profits?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...