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rity is doing the right thing, even when no one is watching." -CS Lewis Question...

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Accounting

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rity is doing the right thing, even when no one is watching." -CS Lewis Question 26 The factory and offices of infinite Manufacturing Corporation is near the highway which is to undergo repairs for a period of six months. Inasmuch as its sales during that period have estimated at P12.000 only, the management is contemplating on closing the factory during the period. An analysis of the income statement of the preceding year as submitted to management shows: Sales P120.000 Less Variable manufacturing overhead. P66.000 Fored manufacturing overhead, 20.000 Variable operating expenses. 18.000 Fixed operating expenses 10.000 114.000 Operating Income P 6.000 A temporary shutdown for 6 months is expected to reduce fixed costs and expenses by 40%, but additional cost of security and maintenance of P2.500 and start-up cost of P1.550 will have to be incurred The net difference between having a shutdown and continuing operation during the six-month period would be p Previous Next arch

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