Question 2 A wholesaler sells its product to retailer woughout the state of Malacca. The company has adopted a regional structure with each region consisting of 2 sales territories. Each region has its own regional office and a warehouse which distributes the goods directly to the customer. Each sales territory also has an office where the sales and marketing staff are located. The Malacca City region has 2 sales 90 budgeted results for the next 3 months for these 2 offices are as follows: Jonker Famosa Total (RM000) (RM000) (RM000s) Cost of goods sold 1,600 1,000 2,600 Marketing / salespersons' salaries 300 240 540 Sales office rent 150 120 270 Depreciation of sales office equipment 50 Allocation of warehouse rent 48 72 Regional & headquarters costs: Avoidable costs 760 340 Unavoidable costs 1.100 3,180 1,950 5,130 Total costs assigned to each location 420 (250) 170 Reported profit/ (loss) 3.600 1.700 5.300 Sales 272 458 The company is evaluating if it should discontinue Famosa sales office since it is not profitable. (a) In evaluating the decision to discontinue Famosa, state which of the above costs and revenue are relevant and The company is evaluating if it should discontinue Famosa sales office since it is not profitable. (a) In evaluating the decision to discontinue Famosa, state which of the above costs and revenue are relevant and irrelevant. (4 marks) (6) Examine and conclude, using appropriate computation, whether the company should consider discontinuing the Famosa sales office. (18 marks) (c) Discuss ONE (1) qualitative factor that companies should consider when determining discontinuation decisions