Manuel Inc. produces textiles in many different forms. After recording lower than anticipated profits last year, Manuel has decided to shut down one of its divisions that is not performing well. The accounting manager has compiled the following data on the two divisions being considered for closing: Evaluate the short-term and long-term effects on profits of closing each division. (Loss amounts should be indicated with a minus sign.)

Winter Outerwear

High-End Suits

Net revenues

$

1,050,000

$

5,050,000

Variable costs

540,000

2,040,000

Contribution margin

510,000

3,010,000

Controllable fixed costs

0

2,005,000

Controllable margin

510,000

1,005,000

Noncontrollable fixed costs

755,000

1,510,000

Contribution by SBU

$

(245,000)

$

(505,000)

	winter outwear	high end shuits
shortem effect
longterm effects