a) Profit Statement (showing apportionment of overheads)

b) Profit Statement (marginal principles)

 c) Effect of closing Dept. 2

Overall the company would reduce profit by €198,000 by closing department 2 (€1,004,000 before closure to €806,000). This can be explained by the lost contribution of €248,000 and only savings of €150,000 in overheads. I would advise management not to close department 2.