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Exercise 6-17A (Algo) Asset replacement-opportunity cost LO 6-5 Rooney Freight Company owns a truck that cost $40,000. Currently, the truck's book value is $25,000, and its expected remaining useful life is five years. Rooney has the opportunity to purchase for $28,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,800 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $11,000. Required Calculate the total relevant costs. Should Rooney replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Keep Old Replace With New Total relevant costs Should Rooney replace or continue the old truck? Exercise 6-16A (Algo) Identifying avoidable cost of a segment LO 6-4 Campbell 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 $ 90,000 170,000 62,000 119,000 64,000 86,000 78,000 15,000 Required Determine the amount of avoidable cost associated with the segment. Avoidable cost