Department a Has a Gross Profit of $20,000,direct Departmental Expenses

Multiple Choice

Department A has a gross profit of $20,000,direct departmental expenses of $6,400 and allocated expenses of $19,000 giving a net loss of $5,400.What would be the effect on the total organisation's profit if Department A was closed?

A) Profits would increase by $5,400
B) Profits would decrease $13,600
C) Profits would increase by $20,000
D) Profits would decrease by $20,000