Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 38

Manuel Inc. produces textiles in many different forms. After recording lower than anticipated pro­fits last year, Manuel has decided to shut down one of its divisions that is not performing well. The accounting manager has compiled the following data on the two divisions being considered for closing and asked you to evaluate the short-term and long-term effects on profits of closing each division. Which division should be closed and why