Accounting




Not signed in (Sign In)

Categories



Welcome, Guest

Want to take part in these discussions? If you have an account, sign in now.

If you don't have an account, apply for one now.

Vanilla 1.1.2 is a product of Lussumo. More Information: Documentation, Community Support.

accounting exams









General Accounting Discussions: if there are three departments in a company and two are making losses, is it wise to close them down

Bottom of Page

1 to 3 of 3

  1.  
    • CommentAuthorangel
    • CommentTimeJul 2nd 2008
     
    taking into consideration the costs
    • CommentAuthorCelia
    • CommentTimeJul 9th 2008
     
    Not necessary. You have to look at the company as a whole and take fixed cost into consideration. If the company can cover its fixed cost which have to be paid because they are fixed and does not vary iwth departments the company does not have to close down. If the fixed cost and the variable costs cannot be covered and the company is making a total loss then the company can close down.
    • CommentAuthorshamili
    • CommentTimeJul 25th 2008
     
    I agree with celia.

    As far as the company is able to cover fixed costs & variable costs there is no need to close the company.

1 to 3 of 3

  1.