Question: Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. Revenue from Barbecue Division sales $ 510,000 Salaries for

Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line.

Revenue from Barbecue Division sales $ 510,000
Salaries for Barbecue Division workers (110,000 )
Direct material (315,000 )
Sunk costs (equipment depreciation) (77,500 )
Allocated company-wide facility-sustaining costs (55,000 )
Net loss $ (47,500 )

If the Division is eliminated, what is the total amount of avoidable cost?

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