Mr. Pans owns and operates several retail auto parts and accessories outlets. Management is now considering the possibility of terminating the operation of the Accessories Store and leasing the facilities to another retailer. The monthly results of the Accessories Store operations are as follows: Sales P940,000 Operating expenses directly identifiable with the outlet: Cost of goods sold, etc P890,000 Depreciation 80,000 If operation of Accessories Store is terminated, Mr. Pans can rent-out the facilities for P60,000 a month to a non-competing business. Determine whether the company should continue operations or terminate the Accessories Store and rent-out the facilities. How much is the advantage of better option? Continue the Accessories Store – advantage of P 50,000 Terminate operation of Accessories Store – advantage of P50,000 Continue the Accessories Store – advantage of P10,000 Terminate operation of Accessories Store – advantage of P10,000 Group of answer choices 1 2 3 4
Mr. Pans owns and operates several retail auto parts and accessories outlets. Management is now considering the possibility of terminating the operation of the Accessories Store and leasing the facilities to another retailer. The monthly results of the Accessories Store operations are as follows:
Sales P940,000
Operating expenses directly identifiable with the outlet:
Cost of goods sold, etc P890,000
If operation of Accessories Store is terminated, Mr. Pans can rent-out the facilities for P60,000 a month to a non-competing business.
Determine whether the company should continue operations or terminate the Accessories Store and rent-out the facilities. How much is the advantage of better option?
- Continue the Accessories Store – advantage of P 50,000
- Terminate operation of Accessories Store – advantage of P50,000
- Continue the Accessories Store – advantage of P10,000
- Terminate operation of Accessories Store – advantage of P10,000
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