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and 2 will result in a loss. CVP Analysis and Decision Making Conclusion: Alternative 3 is the most profitable since this will result in a profit of 79.2 Crores for the period. Alteratives 1 3.8 Shut Down vs Continue Decision - Long-Term Evaluation AB Lid has two divisions A and B. Division A manufactures a product AAA for Industrial use whereas Division Blo manufactures the Containers and storos Product AAA by using protectivo materialu "BOB'. AB Lid is exploring the possibility f closing down the Division B and outsource the work to an outside Company Ltd. RIP The details of expenses of Division B during the previous year is as given below: Particulars Direct Material For Manufacturing Container) For Storing Product AM) 6,35,000 Cost of Protective Material BBB 1,75,000 Direct Labour 2,50,000 1,20,000 Maintenance of Machine 96,000 Depreciation of Machine 44,000 Rent of Warehouse 1,25,000 Manufacturing Overheads 1,70,000 Administrative Overheads apportioned to Division B 2,40,000 60,000 X Ltd after full assessment of requirement offered to manufacture the Containers at a cost of 3 12,00,000 per annum on a Contract Basis and store the Product 'AAA at a cost of 5,00,000 per annum. The Stock of Protective Materials costing 4,25,000 with Division B, if disposed off, will fetch only 60% of its value. In case of closure of Manufacturing Department of Division B, the terminal benefits to be given to Employees who can be transferred to Division A is estimated to be