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33. Product Line Decision. The following monthly segmented income statement is for Hal's Hardware. Product Lines Garden Supplies Tools Paint Total Sales revenue $20,000 $15,000

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33. Product Line Decision. The following monthly segmented income statement is for Hal's Hardware. Product Lines Garden Supplies Tools Paint Total Sales revenue $20,000 $15,000 $23,000 $58,000 Variable costs 11,000 8,000 9,000 28,000 Contribution margin $ 9,000 $ 7,000 $14,000 $30,000 Direct fixed costs 3,000 1,500 8,500 13,000 Allocated fixed costs 2,000 5,000 3,000 10,000 Profit $ 4,000 $ 500 $ 2,500 $ 7,000 Management is concerned about the low profit associated with the tools product line and is considering dropping this product line. Allocated fixed costs are assigned to product lines based on floor space used by each product line (measured in square feet), resulting in the following percentages for garden supplies, tools, and paint, respectively: 20 percent, 50 percent, and 30 percent. If the tools product line is eliminated, total allocated fixed costs will be assigned as follows: 62.5 percent to garden supplies, and 37.5 percent to paint. All variable and direct fixed costs for the tools product line will be eliminated

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