Calgary Corporation Is Closing One of Its Divisions

question 41

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.
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?

• A)$10,000 decrease
• B)$40,000 decrease
• C)$40,000 increase
• D)$30,000 decrease

---

Definitions:

Telemarketing

The practice of marketing goods or services to potential customers over the telephone.

Accessibility Issues

Problems that prevent users, especially those with disabilities, from accessing or fully interacting with websites, apps, or digital tools.

Apple Watches

A line of smartwatches designed and marketed by Apple Inc. that offer various functionalities including fitness tracking, health-oriented capabilities, and wireless telecommunication.

Accuracy Issue

An accuracy issue refers to errors or discrepancies in data or information that can lead to incorrect results or conclusions.