Replace a Department

Assume once again that all fixed costs are unavoidable. If the company discontinues one of the current departments, it plans to replace the discontinued department with a Shoe Department. The company expects the Shoe Department to produce $84,000 in sales and have $47,000 of variable costs. Because the shoe business would be new to Devine Fashion, the company would have to incur an additional $7,100 of fixed costs (advertising, new shoe display racks, and other fixed costs) per quarter related to the department. What should the company do now?

Don't use plagiarized sources. Get Your Custom Essay on
 Replace a Department
Just from $13/Page
Order Essay
ORDER NOW »»

and taste our undisputed quality.