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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: Sales revenue Less: Variable
Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Sales revenue Less: Variable expenses Contribution margin Less direct fixed expenses Alanson Boyne Conway Total $1,280 $185 $450 $1,915 360 1,520 $90 $395 1,115 45 $165 $140 Depreciation 15 85 $20 $40 (18) 50 12 Salaries Segment margin Direct fixed expenses consist of depre 95 96 $42 ciation 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 remain 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 ex ample, "15000" rather than "15*
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