A company is evaluating its plans to close a unit within its business. If closed, the employees at the unit would be redeployed elsewhere in the business.
The costs associated with the closure are as follows:
- net book value of unit assets (no resale value) – £35k
- estimated direct cost of closure of the unit – £25k
- existing fixed overheads apportioned to unit – £16k
- wages of unit employees – £20k
What is the relevant cost of closure of the unit?
Select ONE answer:
- £25k
- £41k
- £61k
- £96k
Show your workings to arrive at your answer, and explain and justify your reasons:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 1
- Correct
- Not correct
- Not correct
- Not correct
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