Q2. AJS Medical Supply Company sells medical products through 3 channels: hospital supplies, retail stores and e-business. It is trying to decide whether to continue distributing hospital supplies. The following information is available for AJS's business segments. Assume that all direct fixed costs could be avoided if a segment is dropped and that the total common fixed costs would remain unchanged if a segment is dropped. (Figures in rupees): Page 1 of 3 Name: Roll No.: Sales Variable Costs Contribution Margin Direct Fixed Costs Allocated Common Fixed Costs Net Income Hospital Supplies 12,00,000 6,40,000 5,60,000 5,00,000 2,00,000 Retail Stores 44,00,000 20,00,000 24,00,000 8,00,000 7,00,000 E- business 36,00,000 14,00,000 22,00,000 9,00,000 6,00,000 (1,40,000) 9,00,000 7,00,000 Advise the management as to whether the Hospital supplies segment should be dropped or continued. Give reasons and explanations for your answer showing how the total profit of AJS would change if the segment is dropped. (10 Marks)