Help Sav Exercise 6-16A Identifying avoidable cost of a segment LO 6-4 is consid

ID: 2514282 • Letter: H

Question

Help Sav Exercise 6-16A Identifying avoidable cost of a segment LO 6-4 is considering the elimination of one of its segments. The segment incurs the following fixed costs. If the segment is eliminated, the building it uses will be sold Supervisory salaries Allocation of companywide facility-level costs original cost of building Book value of building $ 94,000 176,000 7,000 129,000 69,000 89,000 78,000 13,000 Maintenance costs on equipment Real estate taxes on building Requir?d Determine the amount of avoidable cost associated with the segment. Prev 10 of 10 E K Prev 10 of 10

Explanation / Answer

Avoidable cost

Amt

Advt Expenses

94000

Supervisory salary

176000

Maintenance cost of equipment

78000

Real state tax on building

13000

market value of the building(opportunity cost)

89000

Total

450000

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