A-LevelAccountingTraditional costing methods9706/12 · Oct/Nov 2015 · Q191 Mark

A trader runs a manufacturing business. Which department should it close?

Adepartment 1 where contribution exceeds fixed costs

Bdepartment 2 where contribution is less than fixed costs

Cdepartment 3 where revenue exceeds marginal costs

Ddepartment 4 where revenue is less than marginal costs

✓ Correct answer

D: department 4 where revenue is less than marginal costs

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Topic: Traditional costing methods, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2015 Paper 1 Variant 2, question 19.

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