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Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line. Revenue from Barbecue Division sales $ 510,000 Salaries for
Based on the segment income statement below, Chips, Inc. is considering eliminating its Barbecue Division line.
| Revenue from Barbecue Division sales | $ | 510,000 | ||
| Salaries for Barbecue Division workers | (110,000 | ) | ||
| Direct material | (315,000 | ) | ||
| Sunk costs (equipment depreciation) | (77,500 | ) | ||
| Allocated company-wide facility-sustaining costs | (55,000 | ) | ||
| Net loss | $ | (47,500 | ) | |
If the Division is eliminated, what is the total amount of avoidable cost?
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