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Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement, with amounts given in thousands, follows: Line Item Description Torch Elk Walloon
Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement, with amounts given in thousands, follows:
Line Item Description Torch Elk Walloon Total
Sales revenue $ $ $ $
Less: Variable expenses
Contribution margin $ $ $ $
Less direct fixed expenses:
Depreciation
Advertising
Segment margin $ $ $ $
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.
Assume that of the Torch customers choose to buy from Charlevoix because it offers a full range of products, including Walloon. If Walloon were no longer available from Charlevoix, these customers would go elsewhere to purchase Torch.
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