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

Question

Quizplus · Accepted Answer

The overhead costs of the entity that have been allocated to the department should not be included in the analysis of closing a department because these costs are likely to remain unchanged whether the department is closed or not. They are fixed costs that do not directly impact the decision regarding the closure of a specific department.

If Consideration Is Being Given to Closing a Department a Complete