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Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows: Torch Elk Walloon Total (Shown in 000's) Sales revenue $1,280
Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows: Torch Elk Walloon Total (Shown in 000's) Sales revenue $1,280 $185 $345 $1,810 Less: Variable expenses 1,115 45 259 1,419 Contribution margin $165 $140 $86 $391 Less direct fixed expenses: Depreciation 50 15 14 79 Advertising 95 85 88 268 Segment margin $20 $40 $(16) $44 Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different marketing campaign whose advertising would be eliminated if the associated product were dropped. Required: 1. Conceptual Connection: Estimate the impact on profit that would result from dropping Walloon. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Increase
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