Answer:
the amount of avoidable cost associated with the segment is $754,000
Explanation:
The cost associated with the segment to be eliminated including:
- Advertising expense $140,000
- Supervisory salaries $300,000
- Allocation of companywide facility-level costs $130,000
- The loss for unsold building (*): $60,000
- Maintenance costs on equipment $112,000
- Real estate taxes on building $12,000
The total cost is $754,000
(*) The earning from sold building (book value) = Market value of building $160,000 - Book value of building $100,000 = $60,000
