A value-driven car manufacturer. Windsor, started its business more than 50 years ago, making and selling a sedan body style. Sedans were popular at the time, and this one drove the success of Windsor for years due to its practical yet stylish nature. As times changed. Windsor designed models in different body styles, and those models have outpaced sedans, as follows. The income statements above reflect the second consecutive year the sedan category has lost money. Windsor is concerned about dropping this vehicle, however, since the company's success was originally buil on it. (a) Windsor believes it can save $598,800 in fixed costs associated with the sedans if it drops that vehicle category. Should the company seriously consider dropping it? How much better or worse off, financially, would it be by dropping the sedan? Windsor would be by $ 6 Your answer is partially correct. (d1) Based on your analysis for part (c), what will happen to the allocated costs if Windsor drops the sedars? Recast product line income statements, including a subtotal for segment margin and an overall total column, if Winduor drops the sedan line RRound proportions to 4 decimal ploces, e.g. 0.2513 and final answers to 2 decimal ploces, es. 5,125.76) (d2) What happens to overall operating income? (Round proportions to 4 decimal places, es: 0.2513 and final arwwers to 2 dhcimal places, eg. 5,125.76. (d3) Are any of the other vehicle lines now in jeopardy of losing money? A value-driven car manufacturer. Windsor, started its business more than 50 years ago, making and selling a sedan body style. Sedans were popular at the time, and this one drove the success of Windsor for years due to its practical yet stylish nature. As times changed. Windsor designed models in different body styles, and those models have outpaced sedans, as follows. The income statements above reflect the second consecutive year the sedan category has lost money. Windsor is concerned about dropping this vehicle, however, since the company's success was originally buil on it. (a) Windsor believes it can save $598,800 in fixed costs associated with the sedans if it drops that vehicle category. Should the company seriously consider dropping it? How much better or worse off, financially, would it be by dropping the sedan? Windsor would be by $ 6 Your answer is partially correct. (d1) Based on your analysis for part (c), what will happen to the allocated costs if Windsor drops the sedars? Recast product line income statements, including a subtotal for segment margin and an overall total column, if Winduor drops the sedan line RRound proportions to 4 decimal ploces, e.g. 0.2513 and final answers to 2 decimal ploces, es. 5,125.76) (d2) What happens to overall operating income? (Round proportions to 4 decimal places, es: 0.2513 and final arwwers to 2 dhcimal places, eg. 5,125.76. (d3) Are any of the other vehicle lines now in jeopardy of losing money
