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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
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 Sales revenue $1,200 $105 $330 $1,795 Less: Variable expenses 1,115 45 264 1,424 Contribution margin $165 $140 866 $371 Less direct fixed expenses:" Depreciation 50 15 13 78 Salaries 95 85 Segment margin $20 $40 116 (63) 296 1-3 Direct fixed expenses consist of depreciation and plant supervisory salaries. All depredation on the equipment is dedicated to the product Gees. None of the equipment can be said Assume that each of the three products has a different supervisor whose position would be eliminated if the associated product were dropped Required: Conceptual Connection: Estimate the impact on profit that would result from dropping Conway Enter amount in full, rather than in thousands. For example, "15000 rather than "23" Should Petoskey keep or drop Conway?
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