Problem #1 - Keep or Drop a Product (or Segment) Werner Inc. has the following information about its 3 products: Product Product Product A B C Total Sales 921,000 262,000 408,000 251,000 Variable expenses 482,000 116,000 185,000 151,000 Contribution margin 459,000 146,000 213,000 100,000 Fixed expenses: Marketing, traceable 80.400 8,900 40.100 20,400 Depreciation of equipment 44,200 20 800 7 800 15,600 Manager Salaries 115,500 40,700 38,600 36,200 Allocated common fixed expenses 184 200 52 400 81.600 50 200 Total fixed expenses 413,300 122,800 168,100 122,400 Net operating income (loss) 45,700 23,200 44,800 (22.400) Management is trying to decide whether to keep or discontinue Product C. If Product C is discontinued, the equipment used has no other alternative use. Required: What is the impact on net operating income by discontinuing Product C