Management Decision making...

The manager of Q Corporation is recommending the closure of Branch B in order to eliminate its net loss of P33,750. The income statement shows: Home Branch Branch Office A B Sales P800,000 P300,000 P500,000 Cost of sales P400,000 P120,000 P250,000 Operating expenses directly related to sales 80,000 30,000 80,000 Operating expenses indirectly related to sales 90,000 20,000 110,000 General & administrative expenses allocated 150,000 56,250 93,750 Total costs & expenses P720,000 P226,250 P533,750 Operating income P80,000 P73,750 P(33,750) If Branch B is closed, one personnel (with salary of P30,000) have to be transferred to the home office. Branch B has furniture costing P120,000 and with an estimated useful life of 5 years has to be transferred also to the home office. REQUIRED: 1. Do you agree with the manager? Explain