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P2.5 Cindy's Restaurant has three sales revenue departments with direct costs and average monthly figures given in the following information: Departments Dining Banquets Beverages Sales
P2.5 Cindy's Restaurant has three sales revenue departments with direct costs and average monthly figures given in the following information: Departments Dining Banquets Beverages Sales revenue $204,000 $110,000 $92,000 Cost of sales 81,600 41,800 29,440 Wages and salaries cost 65,280 35,200 12,880 Other direct costs 18,360 8,800 1,840 The restaurant also has the following indirect, undistributed costs: Administrative and general expenses $12,000 Marketing expenses 10,000 Utilities expense 5,000 Property operation and maintenance 12,120 Depreciation expense 14,000 Insurance expense 4,000 c. After allocating the indirect costs, would you consider closing any of the divisions? Why or why not
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