KEEP-OR-DROP DECISION Refer to the Petoskey Company information provided in Exercise 23-30. In addition, assume that 20 percent of the Alanson customers choose to buy from Petoskey because it offers a full range of products, including Conway. If Conway were no longer available from Petoskey, these customers would go elsewhere to purchase Alanson.

Required:

Estimate the impact on profit that would result from dropping Conway. Explain why Petoskey should keep or drop Conway.

Exercise