Identifying avoidable cost of a segment
Hanley 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 |
$ 92,000 |
|
Supervisory salaries |
151,000 |
|
Allocation of companywide facility level costs |
49,000 |
|
Original cost of building |
110,000 |
|
Book value of building |
50,000 |
|
Market value of building |
80,000 |
|
Maintenance costs on equipment |
70,000 |
|
Real estate taxes on building |
6,000 |
Required
Based on this information, determine the amount of avoidable cost associated with the segment.