Ellie Ice-creams owner is disturbed by the poor profit performance of his ice cream counter.

He has prepared the following profit analysis for the year just ended:

	Keep the counter	Eliminate the counter
Sales Revenues	400,000
Less: Variable expenses
Direct Material	160,000
Direct Labor	100,000
Variable Overhead	10,000
Contribution margin	130,000
Less: Fixed expenses
Depreciation of counter equipment	20,000
Supervisory salaries	30,000
Insurance	30,000
Depreciation of building (allocated)	25,000
General overhead (allocated)	25,000
Net profit	(0)

The owner is thinking the elimination of this counter. If it is eliminated then:

• Depreciation of counter equipment is avoidable
• The supervisory salaries is avoidable
• The insurance expense is unavoidable
• The depreciation of building unavoidable
• The general overhead is unavoidable

Required:

1. Should the company eliminate the counter or not? Fill in the table and justify your answer.

b. Mention at least three relevant costs