Please give detailed explanation. 3)

3) What other critical review needs to be considered before deleting a service line even though the contribution margin may be negative

Assume each Departments individual Contribution Margins have been relative stable for the last 3 years at the levels noted below Sports Medicine Radiology Orthopedics Cardiology OBGYN Service Total in the... Description in thousands $ Revenue Scranton Wilkes Barre Total Revenue S $ 2,000 3,000 5,000 12,000 S 15,000 27,000 S 10,000S 12.000 22,000 S 12,000 14.000 26.000 5,000 S 41,000 6.000 50.000 11,000$ 91,000 S $ Variable Costs Variable Expense Labor Disposable Equipment Disposable Supplies Total Variable Cost Contribution Margin 4,500 S 750 750 6,000 $ (1,000) $ 10,000 S 1,000 2.000 13,000 S 14,000$ 10,000 S 1,500 3,000 14.500 $ 7,500S 12,000 S 2.000 4.000 18,000 $ 8,000S 7,000 1,000 3.000 11,000 - S 43,500 6,250 12.750 $ 62,500 $ 28,500 Departmental Fixed Cost Allocated Overhead Cost Net Income/Loss 450 S 275 S (1.725) S 10,000 $ 1.484 S 2,516 S 5,000 1.209 S 1.291 S 4.000 S 1.429 S 2,571 S 450 $ 604 $ (1.054) S 19.900 5,000 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. 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 for your results