Economic Convenience Exercise The Company Beta has the following monthly cost related to one of its departments: Man. Labour 20.000 Salary of the Department Director 2.000 Direct Materials 15.000 Industrial Depreciation 20.000 Running Costs 9.000 Manufacturing Overheads 5.000 The Company is thinking about shutting down the department and let an outside supplier perform the same operation. In that case, the purchasing costs would be equal to 40.000 Consider the following additional information: a. The workforce cannot be used in other departments and cannot be sacked b. The depreciations are referred for 10.000 to a machine that can be sold with a complete cost recovery and for 10.000 for a part of the building which is shared with other departments c. Running costs can be eliminated by 4.000 d. Manufacturing overheads are indirect and not ceasing Is it worth eliminating the mentioned Department? Answer by adopting the differential reasoning