Question

Bradley Corporation is considering the elimination of one of its segments. The following fixed costs pertain to the segment. If the segment is eliminated, the building it uses will be sold.
Annual advertising expense ............ $180,000
Market value of the building ........... 30,000
Annual depreciation on the building ........ 20,000
Annual maintenance costs on equipment ....... 26,000
Annual real estate taxes on the building ....... 8,000
Annual supervisory salaries ............. 72,000
Annual allocation of companywide facility-level costs . 30,000
Original cost of the building ............ 75,000
Current book value of the building ......... 54,000
Required
Based on this information, determine the amount of avoidable cost associated with the segment.



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  • CreatedFebruary 07, 2014
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