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Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. $ 522,000 (122,000) Revenue from Barbecue Division sales Salaries for Barbecue Division workers Direct material (333,000) Sunk costs (equipment depreciation) Allocated company-wide facility-sustaining costs (80,500) (61,000) Net loss $ (74,500) If the Division is eliminated, what is the total amount of avoidable cost? Multiple Choice $455,000. $535,500. $541,500.

Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. $ 522,000 (122,000) Revenue from Barbecue Division sales Salaries for Barbecue Division workers Direct material (333,000) Sunk costs (equipment depreciation) Allocated company-wide facility-sustaining costs (80,500) (61,000) Net loss $ (74,500) If the Division is eliminated, what is the total amount of avoidable cost? Multiple Choice $455,000. $535,500. $541,500.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4th option is 583,000.
Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. $ 522,000 (122,000) (333,000) Revenue from Barbecue Division sales Salaries for Barbecue Division workers Direct material Sunk costs (equipment depreciation) Allocated company-wide facility-sustaining costs (80,500) ( 61,000) $ (74,500) Net loss If the Division is eliminated, what is the total amount of avoidable cost? Multiple Choice $455,000. $535,500. $541,500.
Transcribed Image Text:Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. $ 522,000 (122,000) (333,000) Revenue from Barbecue Division sales Salaries for Barbecue Division workers Direct material Sunk costs (equipment depreciation) Allocated company-wide facility-sustaining costs (80,500) ( 61,000) $ (74,500) Net loss If the Division is eliminated, what is the total amount of avoidable cost? Multiple Choice $455,000. $535,500. $541,500.
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