If the department is eliminated, a saving of $10,000 would occur. This is based on the data provided: the annual contribution margin is $35,000, and the annual fixed costs are $70,000. If fixed costs of $25,000 cannot be avoided, the losses when the department operates can be calculated as follows: Loss = contribution margin - fixed costs = $35,000 - $70,000, which indicates a loss of $35,000. If the department were to be removed, the unavoidable fixed cost drops to $25,000, resulting in a loss of $25,000. Therefore, the savings from eliminating the department is calculated as: Savings = $35,000 - $25,000, leading to a total saving of $10,000.
Those fixing the rides. Explanation: The Walt Disney Company has a strategy aimed at delivering a complete experience during visits to its resorts and theme parks. Disney aims to craft a magical atmosphere, enchanting visitors with its characters and performances. To achieve this, thorough training of its employees is crucial; most of them are deemed cast members, embodying iconic character fantasies and assisting visitors, thereby enhancing the overall experience. In this context, the employees most likely regarded as the "ingroup" in a theme park are those supplying technical repair support, as their skills are more technical and less performance-based, differing from the behaviors expected of most Disney staff.
