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Calgary Corporation Is Closing One of Its Divisions  Sales $80,000 Variable costs 40,000 Overhead 40,000\begin{array} { l r } \text { Sales } & \$ 80,000 \\\text { Variable costs } & 40,000 \\\text { Overhead } & 40,000\end{array}

question 82

Multiple Choice

Calgary Corporation is closing one of its divisions. Operating data on this division follows:  Sales $80,000 Variable costs 40,000 Overhead 40,000\begin{array} { l r } \text { Sales } & \$ 80,000 \\\text { Variable costs } & 40,000 \\\text { Overhead } & 40,000\end{array} Overhead consists of $30,000 in salary and $10,000 for rent and insurance. The salary is for the chief engineer, who will continue to work for Calgary even if the division is closed.
Assuming all overhead costs continue to be incurred even if the division closes, what will be the effect on overall company profits of closing the division?


Definitions:

Saliva

A clear liquid secreted by the salivary glands in the mouth, containing enzymes that aid in the digestion of carbohydrates and serve as a lubricant for food.

Diaphragm Muscle

A large, dome-shaped muscle located at the base of the lungs and chest cavity that plays a key role in breathing.

Rib Muscles

Muscles located between the ribs that assist in the process of respiration by aiding in chest expansion and contraction.

External Intercostal Rib Muscles

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