Exercise 13-19 Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total $1,280 1,115 165 $185 45 140 $300 225 75 $1,765 1,385 380 Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses: Depreciation Salaries Segment margin 50 95 20 15 85 $ 40 10 80 $ (15) 75 260 $ 45 $ Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Also, each of the three products has a different supervisor whose position would be eliminated if the associ- ated product were dropped. NEL Chapter 13 Short-Run Decision Making: Relevant Costing 667 Required: CONCEPTUAL CONNECTION Estimate the impact on profit that would result from dropping Conway. Explain why Petoskey should keep or drop Conway