If consideration is being given to closing a department a complete analysis should take into account all of the following except:
A) alternative uses of the space provided.
B) the effect that the closure might have on the sales of other departments.
C) the overhead costs of the entity that have been allocated to the department.
D) the costs of closure.

Question

Quizplus · Accepted Answer

Allocated overhead costs are not directly affected by the closure of a department since they represent the distribution of costs that the entity incurs regardless of any single department's operation. These costs will still be incurred by the entity and will need to be allocated to other departments or absorbed in a different manner.

If Consideration Is Being Given to Closing a Department a Complete