You have just been appointed vice president of the North Region of the Bank Services Corporation (BSC). The company provides check processing services for small banks. The banks send checks presented for deposit or payment to BSC, which records the data on each check in a computerized database. BSC then sends the data electronically to the nearest Central Bank check-clearing center where the appropriate transfers of funds are made between banks. The North Region has three check processing centers, which are located in A, B, and C areas of the region. Prior to your promotion to vice president, you had been the manager of a check processing center in Central Region. Immediately after assuming your new position, you requested a complete financial report for the just-ended fiscal year from the regions controller. You specified that the financial report should follow the standardized format required by the headquarters for all regional performance reports. That report follows:

Bank Services Corporation (BSC)
North Region
Financial Performance
			Check Processing Centers
			Total	A	B	C
			Rs. In million
Sales			50	20	18	12
Operating expenses:
Direct labor			32	12.5	11	8.5
Variable overhead			0.85	0.35	0.31	0.19
Equipment depreciation			3.9	1.3	1.4	1.2
Facility expense			2.8	0.9	0.8	1.1
Local administrative expense*			0.45	0.14	0.16	0.15
Regional administrative expense			1.5	0.6	0.54	0.36
Corporate administrative expense			4.75	1.9	1.71	1.14
Total operating expense			46.25	17.69	15.92	12.64
Net operating income (loss)			3.75	2.31	2.08	(0.64)

Common allocated fixed cost: Local, regional and corporate administrative expenses.

Required:

1. From the standpoint of the company as a whole, should the C processing center be shut down and its work redistributed to other processing centers in the region? Explain the situation in the context of information provided above.

2. Do you think your decision to shut down the C facility is ethical? Explain.