A company has three branches and their summarized accounting particulars for a period are given as follows:
|
Branches Sales |
Chennal |
Cuttack |
Jaipur |
|
Branch expenses: |
9,00,000 |
8,00,000 |
14,00,000 |
|
Salaries, commission and travelling expenses: |
82,000 |
80,000 |
1,20,000 |
|
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18,000 |
20,000 |
22,000 |
|
Other expenses |
20,000 |
22,000 |
24,000 |
Central Office at (Mumbai) expenses:
Rs. 3,10,000 apportioned to branches on the basis of sales 25% of sales is taken as the Gross profit.
Based on the above information, prepare a comparative profit and loss statement for the different branches. Offer your views on the contemplated closure of the branch which shows a loss assuming that in the event of closure of a branch, the Central Office expenses:
- ill remain unaffected.
- Can be reduced by 30%