A company is considering replacing its existing computer system with a new computer system. The new system can offer considerable savings in computer processing and inventory management costs. Information about the existing system and the new system follow:

	Existing Computer	New Computer
Original cost	$10,000	$15,000
Annual operating cost	$ 3,500	$ 2,000
Accumulated depreciation	$ 6,000
Current salvage value of the existing system	$ 4,000
Remaining life in 5 years	5 years
Salvage value in 5 years	$ 0	$ 0
Annual depreciation	$ 2,000	$ 3,000

Which of the following is an avoidable cost if a company gives up making a product?

Select one:

a. All the variable costs associated with making that product

b. The cost of the supervisor who will be laid off as a result of discontinuing the product

c. The costs of the machinery that can be sold when the product is discontinued

d. All of the above