Sales Less variable cost of goods sold Less commissions Contribution margin Less traceable fixed expenses: Reshier Company Segmented Income Statement Model 1 Model 2 Model 3 Total 225,000 598,000 603,500 1,426,500 97,000 171,120 332,400 600,520 4,500 25,000 23.250 52,750 123,500 401,880 247,850 773,230 Engineering 54,750 Setting up 45,104 Equipment rental 21,000 < < 5,925 14,325 75,000 47,234 103,666 196,000 21,000 Customer service 45,576 4,684 60,740 111,000 Product margin -42,930 344,037 69.119 370,230 Less common fixed expenses: Factory overhead Selling and admin. expense 103,000 204,000 Operating income 63,230 2. Using your answer to Requirement 1, assume that Reshier Company is considering dropping any model with a negative product margin. What are the alternatives? Keeping Model 1 or dropping it