Calgary Corporation Is Closing One of Its Divisions

question 120

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
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.
Rent and insurance that will cease if the division is closed is an:

• A)Unavoidable and irrelevant cost
• B)Unavoidable and relevant cost
• C)Avoidable and irrelevant cost
• D)Avoidable and relevant cost

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Definitions:

Benign Prostatic Hyperplasia

A non-cancerous enlargement of the prostate gland, common in older men, which can cause urinary problems.

Cardura (Doxazosin)

Cardura, or Doxazosin, is a medication used to treat high blood pressure and symptoms of benign prostatic hyperplasia by relaxing blood vessels and muscles in the prostate.

Anorchism

A medical condition characterized by the absence of one or both testes at birth.

Azoospermia

A medical condition where a man's semen contains no sperm, leading to infertility.