Question
Channing Company is a large internet retailer with fulfillment warehouses in numerous locations throughout the U.S. One of Channing's warehouses has been showing losses over
Channing Company is a large internet retailer with fulfillment warehouses in numerous locations throughout the U.S. One of Channing's warehouses has been showing losses over several quarters, and management is considering closing the warehouse. If the warehouse is closed, only the warehouse manager will be retained by Channing. The warehouse manager's annual salary is $65,000. Both the insurance and the advertising are direct costs of the warehouse and will be eliminated if the warehouse is closed. The Depreciation on fixtures is for fixtures specific to this warehouse. These fixtures will have no resale value and will be donated to a charitable organization if the warehouse is closed. Following is the most recent income statement for the warehouse:
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