Snowy Mountain Retailers Are Considering Closing One of Its Low-Profit

question 25

Multiple Choice

Snowy Mountain Retailers are considering closing 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) Fixed costs
• B) Variable costs
• C) Controllable costs
• D) Avoidable costs

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Definitions:

Stability

The state of being steady, consistent, and not prone to change, which is often sought after in various contexts for predictability and reliability.

Autonomy

The degree to which an individual has the freedom to make decisions and take actions independently.

Coordination

The act of organizing and aligning activities, tasks, and efforts among individuals or groups to achieve common goals efficiently.

Complex Task

A task that involves multiple steps, variables, or elements, requiring significant effort, skill, or planning to successfully complete.