Instructions Insurance expense are 25% unavoidable. Share of office department expenses are 20% unavoidable. Share of purchasing department expenses are 75% unavoidable. Determine if the segment should be eliminated or continued Avoidable Expense Unavoidable Expenses Total Sales COGS $ 1,000,000 750,000 Gross Profit 250,000 Direct Expenses Salaries and Wages Depreciation Expense - Equipment Total direct expenses 200,000 30,000 230,000 20,000 Departmental contribution to overhead Indirect expenses Rent and utilities expense Advertising expense Insurance expense Share of office department expenses. 50,000 5,000 4,000 45,000 Share of purchasing department expenses 40,000 31 Total indirect expenses 144,000 (124,000) 33 Operating income (loss) 35 Total aviodable costs 36 Total unavoidable costs 37 $ 1,000,000 38 39