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Peloskey Company produces three products: Aanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Sales revenue Alanson $1,280 1,115 Total
Peloskey Company produces three products: Aanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Sales revenue Alanson $1,280 1,115 Total $1,825 Boyne Conway $185 $360 45 270 $140 $90 Less: Variable expenses Contribution margin 1,430 $165 395 Less direct fixed expenses: Depreciation 5015 95 85 Salaries 116 296 Segment margin $20 $40 $(37) 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 $ 30,000 X Contribution margin Less direct fixed expenses: Depreciation Salaries 296 Segment margin $40 $(37) $23 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 v $ 30,000 X Should Petoskey keep or drop Conway? Droo
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