Exercise 13-16A (Algo) Identifying avoidable cost of a segment LO 13-4 Rundle 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 Required $ 89,000 174,000 59,000 120,000 64,000 98,000 73,000 6,000 Determine the amount of avoidable cost associated with the segment. Avoidable cost Exercise 13-5A (Algo) Opportunity costs LO 13-1 Norman Dowd owns his own taxi, for which he bought a $10,600 permit to operate two years ago. Mr. Dowd earns $31,800 a year operating as an independent but has the opportunity to sell the taxi and permit for $38,500 and take a position as dispatcher for Carter Taxi Co. The dispatcher position pays $29,500 a year for a 40-hour week. Driving his own taxi, Mr. Dowd works approximately 55 hours per week. If he sells his business, he will invest the $38.500 and can earn a 12 percent return. Required a. Determine the opportunity cost of owning and operating the independent business. b. Calculate the earnings of Norman Dowd operating as an independent and the earnings of Norman Dowd working as a dispatcher Based solely on financial considerations, should Mr. Dowd sell the taxi and accept the position as dispatcher? es a Opportunity cost b Operating as an independent Working as a dispatcher Should Mr. Dowd sell the taxi and accept the position as dispatcher