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Preview in Window SI Structuring a keep-or-Drop Product Line Problem Shown below is a segmented income statement for Orzo Company's three laminated flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200.000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595.000 Contribution margin $175,000 $ 80,000 $50,000 $305,000 Less direct fixed expenses Machine rent (5,000) (20,000) (50,000) (75000) Supervision (15,0007 (10,000) (20,000) (45.000) Depredation (35.000) (10.000) (25.000) (70.000 Segment margin $120.000 $ 40,000 $(45.000) $115.000 Orzo's management is deciding whether to keep or drop the parquet groduct line. Oro parquet Mooring productos margin of 550.000 (sales of $300.000 less total variable costs of $250.000) all variable costs are relevant. Relevant facute with this line include 500.000 machine and 54,700 in supervisionales Required: 1. list that being considered with respect to the Type here to search O - D % & a 0 8 # 3 7 9 CO 5 4. 2 Machine rent (5,000) (20,000) (50,000) (75,000) Supervision (15,000) (10,000) (20,000) (45,000) Depreciation (35,000) (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (45,000) $115,000 Orzo's management is deciding whether to keep or drop the parquet product line. Orzo's parquet flooring produ margin of $50,000 (sales of $300,000 less total variable costs of $250,000). All variable costs are relevant. Rele with this line include $30,000 in machine rent and $4,700 in supervision salaries. Sales, variable cost, supervision cost and machine rent. Variable cost and machine rent. to the parquet flooring line Sales and variable cost. None of the above parquet flooring line Variable cost and pachine rent 3. Which alternative is more cost effective and by how much? DOD X by $10,000 Type here to search O BP >> TE