Broadway Store Is Considering Closing Down One of Its Low-Profit

question 34

Multiple Choice

Broadway Store is considering closing down one of its low-profit departments.Assume that discontinuance of this department will not affect sales of the remaining departments.Which of the cost classifications below should be compared with departmental income to determine whether or not to close the department?

• A)Variable costs
• B)Direct costs
• C)Controllable costs
• D)Avoidable costs

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Definitions:

Increased Significantly

A term used to describe a situation where a change or difference is both statistical and meaningful in magnitude, indicating a departure from chance.

Significantly Reduced

A phrase typically used in research to indicate a notable decrease in the magnitude or quantity of a measured variable.

Not Affected

Remaining unchanged or undisturbed by external influences or events.

Deindividuation

A psychological state where an individual loses their self-awareness and sense of individuality, often leading to disinhibited and impulsive behavior, usually in group settings.