Keep$-$or$-$Drop Decision

Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement, with amounts given in thousands, follows:

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:

Decrease &

Conceptual Connection: Should Charlevoix keep or drop Walloon?

$K{i}_{?}$

the CFO's attempt to better forecast the future behavior of its key customers. $[$Refer to Exhibit $2-2]$

This use of historical customer behavior data represents an example of a predictive datalytic.