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Question Three the compan Wizzard has two Branchs, the financial information of them were: B A Total Rvenues $100,000 $150,000 $220,000 $470,000 C.G.S ($75,000) ($75,000)|($120,000)||$270,000)
Question Three the compan Wizzard has two Branchs, the financial information of them were: B A Total Rvenues $100,000 $150,000 $220,000 $470,000 C.G.S ($75,000) ($75,000)|($120,000)||$270,000) Other VC ($20,000) ($30,000) ($30,000) ($80,000) Dep.Exp ($10,000) ($12,000) ($15,000) ($37,000) Allocated FC ($15,000) ($25,000) ($40,000) ($80,000) Operating Income ($20,000) $8,000 $15,000 $3,000 the depreciation expense is related to equipment used in each branch and has no salvage value if any branch is stopped and closed Because the operating loss of Branch A the the financial manager suggest to close barnch A, do you agree with this suggestion under following Assumptions 1- Keeping Equipment and none of any fixed cost could be avoided 2- still keeping equipment but 2/3 of A fixed cost could be avoided and elliminated 3- if A closed the company could benefit from equipment and produce new product which could generate additional income of $20000, None of Fixed Cost could be avoided
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