marsThe manager of Q Corporation is recommending the closure of Branch B inorder to eliminate its net loss of P33,750. The income statement shows:HomeBranchBranchOfficeBSalesP800,000 P300,000 P500,000P400,000 P120,000 P250,00030,00020,00056,250Cost of salesOperating expenses directly related to salesOperating expenses indirectly related to salesGeneral & administrative expenses allocatedTotal costs & expenses80,00080,00090,000110,00093,750P720,000 P226,250 P533,750P73,750 P(33,750)150,000P80,000Operating incomeIf Branch B is closed, one personnel (with salary of P30,000) have to betransferred to the home office. Branch B has furniture costing P120,000 and with anestimated useful life of 5 years has to be transferred also to the home office.REQUIRED:1. Do you agree with the manager? Explain.

Answer: We do not agree with manager, as if Branch B is closed Net operating income for company will…

If Branch B is closed, one personnel (with salary of P30,000) have to be transferred to the home office. Branch B has furniture costing P120,000 and with an estimated useful life of 5 years has to be transferred also to the home office.

If Branch B is closed, one personnel (with salary of P30,000) have to be transferred to the home office. Branch B has furniture costing P120,000 and with an estimated useful life of 5 years has to be transferred also to the home office.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter13: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 33P

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