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 $360 $1,825 Less: Variable expenses $1,280 1,115 $165 $185 45 $140 270 1,430 Contribution margin $395 Less direct fixed expenses: Depreciation 15 80 15 100 95 Salaries 85 280 20 $40 $(25) Segment margin $35 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. 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 Check My Work Depreciation Salaries 15 85 $40 80 280 95 15 100 $(25) Segment margin $20 $35 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. 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 "15". Increase $ 23,000 X Should Petoskey keep or drop Conway? Drop Feedback Check My Work Look at contribution margin and adjust for dropping product line. Consider the sunk cost and that it is not relevant