Solved: What amount of cost is avoidable if ted outsources, Accounting Basics

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What amount of cost is avoidable if ted outsources

The Ted Company is considering eliminating the following product line:

Product AXP
Sales	$42,000
Less variable costs:
Raw materials	26,000
Direct labor	5,800

Contribution margin	$10,200
Less fixed costs:
Production costs allocated to products	15,400

Profit (loss)	$(5,200)

What amount of cost is avoidable if Ted outsources production of this product?

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Accounting Basics: What amount of cost is avoidable if ted outsources

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