Furst, Inc. believed it could increase the company's profits by eliminating some product lines. Other companies have also tried to improve their financial performance by downsizing. In November 2017, General Electric announced it would begin a downsizing operation that would result in their exiting businesses using over $20 billion in assets in the next one to two years. In January 2018, Newell Brands, the company whose products include Tupperware, Sharpie pens, Elmer's Glue, and Rawlings sports products, announced it would be reducing its product offerings to the extent that it would close half of its facilities and reduce its revenues by 20 percent Consider the additional information presented as follows, which is hypothetical. All dollar amounts are in thousands, unit amounts are not. Assume that Furst decides to eliminate one shampoo product-line, Luster, for one of its segments that currently produces three products. As a result, the following are expected to occur (1) The number of units sold for the segment is expected to drop by only 135.000 because of the elimination of Luster, since most customers are expected to purchase a Anagen or Catagen product instead. The shift of sales from Luster to Anagen and Catagen is expected to be evenly split. In other words, the sales of Anagen and Catagen will each increase by 35,000 units (2) Rent is paid for the entire production facility, and the space used by Luster cannot be sublet. (3) Utilities costs are expected to be reduced by $35.000. (4) All of the supervisors for Luster were all terminated. No new supervisors will be hired for Anagen or Catagen. (5) Half of the equipment being used to produce Luster is also used to produce the other two products and its depreciation cost must be absorbed by them. The remaining equipment has a remaining a book value of $350.000 and can be sold for only $70,000 (6) Facility-level costs will continue to be allocated between the product lines based on the number of units produced Catagen 410,000 $820,000 Luster 205,000 $410,000 Total 1,025,000 $2,050,000 Product-Line Earnings Statements (Dollar amounts are in thousands) Annual Costs of Operating Each Product Line Anagen Sales in units 410,000 Sales in dollars 5820,000 Unit-level costs: Cost of production 77,900 Sales commissions 10.660 Shipping and handling 18,450 Miscellaneous 6,150 Total unit-level costs 113,160 Product-level costs: Supervisors' salaries 3,200 Facility-level costs: Rent 91,000 Utilities 102,500 Depreciation on equipment 365,000 Allocated company-wide expenses 20,500 Total facility-level costs 579,000 Total product cost 700,360 $119,640 Profit on products 77,909 10,660 16,400 4,100 109,060 42,100 5,400 8,200 2,100 $7,800 197,900 26,720 43,50 12,350 280,020 6,200 2,050 16,450 91,000 102,500 365,000 20,500 579,000 694,260 $125,740 45,000 51,250 182,000 10,250 285,500 348,350 $ 61,650 227,000 256,250 912,000 51.250 1,446,500 1,742,970 307,030 $ Required Prepare revised product line earnings statements based on the elimination of Luster Hint It will be necessary to calculate some be unit data to accomplish this.) (Enter your answers in thousands. Do not round Intermediate calculations. Enter all amounts as positive values:) Totals Revised Product line Earnings Statements Annual Costs of Operating Each Product Line Anagen Catagen Sales in units Sales in dollars Unit-level costs: Total unit-level costs Product-level costs Facility-level costs 1 of 1 Next Facility-level costs: Total facility-level costs Total product cost Profit on products Sale of Luster equipment Segment earnings