Segment Analysis 5

Blue Industries produces four products. Information for the products for the year is as follows:

	Product A	Product B	Product C	Product D
Units produced and sold	10,000	8,000	11,000	9,000
Selling price per unit	$22	$14	$25	$28
Variable expenses per unit	$16	$10	$19	$23

The company's fixed costs totaled $160,000, of which:

$25,000 can be avoided if Product A is dropped

$45,000 can be avoided if Product B is dropped

$27,000 can be avoided if Product C is dropped

$42,000 can be avoided if Product D is dropped

Required:

Assuming you are the CEO of Blue Industries, what action do you take? In support of your decision, include a segmented income statement.