Problem
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 $ 99,000 Supervisory salaries 166,000 Allocation of companywide facility-level costs 53,000 Original cost of building 113,000 Book value of building 66,000 Market value of building 92,000 Maintenance costs on equipment 85,000 Real estate taxes on building 9,000 Required:
Determine the amount of avoidable cost associated with the segment.