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22. Shut down or not. The Beach and Sun Division of Philippine Entertainment, Inc., has been experiencing operational losses in the last 5 years in
22. Shut down or not. The Beach and Sun Division of Philippine Entertainment, Inc., has been experiencing operational losses in the last 5 years in the months of August and September. Its typical monthly income statement during this period is as follows (in thousands): Beach and Sun Division Income Statement For The Month Ended, August 31, 20CY Sales (3,000 visitors) P1,200,000 Variable costs and expenses ( 840,000) Fixed costs and expenses ( 500,000 Net loss P( 140 000) If the company temporarily shuts down its operations in the months of August and September, it still has to pay its unavoidable monthly fixed costs and expenses of P200,000. Re-start up costs before the resumption of regular operations in October are expected to P80,000. During the shut down period, the company would have a chance of renovating some of its facilities and would the firm a total of P150,000
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