Lake Corporation is considering the elimination of one of its segments. The segment incurs the following fixed costs. If the segment iseliminated, the building it uses will be sold.Advertising expenseSupervisory salariesAllocation of companywide facility-level costsOriginal cost of buildingBook value of buildingMarket value of building iMaintenance costs on equipmentReal estate taxes on building$140,000300,000Avoidable cost130,000.220,000100,000160,000112,00012,000RequiredDetermine the amount of avoidable cost associated with the segment.

An avoidable cost is an expense that will not be incurred if a particular activity is not performed.…

Lake 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 Supervisory salaries Allocation of companywide facility-level costs Original cost of building i Book value of building Market value of building i Maintenance costs on equipment Real estate taxes on building $140,000 300,000 Avoidable cost 130,000 220,000 100,000 160,000 112,000 12,000 Required Determine the amount of avoidable cost associated with the segment.

Lake 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 Supervisory salaries Allocation of companywide facility-level costs Original cost of building i Book value of building Market value of building i Maintenance costs on equipment Real estate taxes on building $140,000 300,000 Avoidable cost 130,000 220,000 100,000 160,000 112,000 12,000 Required Determine the amount of avoidable cost associated with the segment.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter14: Quality And Environmental Cost Management

Section: Chapter Questions

Problem 5CE: Verde Company reported operating costs of 50,000,000 as of December 31, 20x5, with the following...

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