Final answer:
Maintenance department decisions at Stazler, Inc. should be based on revenue and variable cost analysis. If revenues exceed variable costs, continuing business is suggested. However, if revenues are less than variable costs, shutting down should be considered.
Step-by-step explanation:
The decision about whether the maintenance department at Stazler, Inc. should continue operating can be based on a simple analysis of revenues and variable costs. When the center earns revenues of $20,000 and has variable costs of $15,000, it implies that it generates enough revenue to cover its variable costs and contributes a margin of $5,000 to fixed costs and profits. Therefore, it would be advisable for the center to continue in business.
However, when the situation is reversed, and the center earns revenues of $10,000 but faces variable costs of $15,000, this indicates a loss situation where the center is not even covering its variable costs. In such a scenario, from a short-term perspective, unless there are strategic or long-term reasons to operate at a loss, the center should consider shutting down to avoid incurring further losses. This decision must be evaluated carefully, considering both the immediate financial implications and the long-term strategic impact on Stazler, Inc.