3. The following monthly segmented income statement is for Durango Company, which has three separate product lines (A, B, and C). B Sales revenue Variable costs Contribution margin Direct fixed costs Allocated fixed costs Profit (loss) $37,500 $ 16,000 $21,500 $19,500 $3,750 $(1,750) $50,000 $27,500 $22,500 $16,000 $5,000 $1,500 C Total $12,500 $100,000 $5,000 $48,500 $7,500 $51,500 $3,500 $39,000 $1,250 $10,000 $2,750 $2,500 Management is concerned about the losses associated with product line A and is considering dropping this product line. Allocated fixed costs are assigned to product lines based on sales. If product line A is eliminated, total allocated fixed costs are assigned to the remaining product lines, and all variable and direct fixed costs for product line A will be eliminated. (6.3) a) Perform differential analysis of these two alternatives (keep product line A or drop it). Follow the format presented in Panel C of Figure 6.6 "Product Line Differential Analysis for Barbeque Company". b) Which alternative is best? Explain. c) Explain why the loss shown for product line A in the segmented income statement might be misleading to management