Question

Ramos Corporation 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.
Advertising expense ................ $ 70,000
Supervisory salaries ................ 150,000
Allocation of companywide facility-level costs ...... 65,000
Original cost of building .............. 110,000
Book value of building ................ 50,000
Market value of building .............. 80,000
Maintenance costs on equipment ........... 56,000
Real estate taxes on building ............. 6,000

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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