Thornton 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 Book value of building Market value of building Maintenance costs on equipment Real estate taxes on building $ 85,000 165,000 53,000 115,000 64,000 83,000 80,000 8,000 Required Determine the amount of avoidable cost associated with the segment. Avoidable cost
Thornton 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 Book value of building Market value of building Maintenance costs on equipment Real estate taxes on building $ 85,000 165,000 53,000 115,000 64,000 83,000 80,000 8,000 Required Determine the amount of avoidable cost associated with the segment. Avoidable cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Thornton 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.
$ 85,000
165,000
53,000
Advertising expense
Supervisory salaries
Allocation of companywide facility-level costs
Original cost of building
Book value of building
Market value of building
Maintenance costs on equipment
Real estate taxes on building
115,000
64,000
83,000
80,000
8,000
Required
Determine the amount of avoidable cost associated with the segment.
Avoidable cost](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F48affd0c-28f4-445f-9da4-6b37cd1ddd8b%2Ff80831da-6deb-49cc-9d92-3e7f904fe732%2F5wz61ip_processed.png&w=3840&q=75)
Transcribed Image Text:Thornton 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.
$ 85,000
165,000
53,000
Advertising expense
Supervisory salaries
Allocation of companywide facility-level costs
Original cost of building
Book value of building
Market value of building
Maintenance costs on equipment
Real estate taxes on building
115,000
64,000
83,000
80,000
8,000
Required
Determine the amount of avoidable cost associated with the segment.
Avoidable cost
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