M Q R Service Line Deletion Assume each Departments individual Contribution Margins have been relative stable for the last 3 years at the levels noted below Sports Medicin Radiology Orthopedics Cardiology OBGYN Service Total Description in thousands Revenue Scranton Wilkes Barre Total Revenue $ 2,000 $ 12,000 $ $ 10,000 $ 12,000 $5,000 $ 41,000 3,000 15,000 12,000 14,000 6,000 50,000 5,000 $ 27,000 $ 22,000 $ 26,000 $ 11,000 $91,000 $ $ $ $ $ Variable Costs Variable Expense Labor Disposable Equipment Disposable Supplies Total Variable Cost Contribution Margin 4,500 $ $ 10,000 $ 750 1,000 750 2,000 6,000 $ 13,000 $ (1,000) $ 14,000 $ 10,000 $ 1,500 3,000 14,500 $ 7,500 $ 12,000 $ 7,000 $43,500 2,000 1,000 6,250 4,000 3,000 12.750 18,000 $ 11,000 $62,500 8,000 $ $28,500 $ $ Departmental Fixed Cost Allocated Overhead Cost Net IncomelLoss $ $ $ 450 $ 275 $ (1.725) $ 10.000 $ 1,484 $ 2.516 $ 5,000 $ 1,209 $ 1,291 $ 4,000 $ 450 $ 19,900 1,429 $ 604 $ 5.000 2,571 $ (1,054) $ 3,600 1) Assuming fixed costs (in total) have also remained constant for the last (3) year period, decide on which service(s) you would delete (if any) to increase profit margin (net income). Thoroughly Explain your answer. 3 3 2) Based on your determination distribute Allocated Overhead based on each remaining departments% of total remaining revenue and eliminated departments Fixed cost evenly to each remaining department. Create a new Profit and Loss table similar to the one above for the remaining deparments retained. 3) What other critical review needs to be considered before deleting a service line even though the contribution margin may be negative