Shown below is a comented income statement for Mullet Matina's threema UNE Boat Total Winter Storage Boat Fuel Concessions Maintenance $4,000,000 1,000,000 45,000,000 Sales revenue $10,000,000 200,000 2,000,000 4,900,000 Less: Variable expenses 7,100,000 42,000,000 800,000 Contribution margin $100,000 $2,900,000 Less direct fixed expenses 700,000 55,000 350,000 1,105,000 Garage/warehouse rent 70,000 50,000 150,000 270,000 Supervision 250,000 75,000 100,000 425,000 Equipment depreciation $1,000,000 $ 600,000 $1,100,000 $ (500,000) Segment margin Relevant fixed costs associated with this line include 60% of Boat Maintenance's garage/warehouse rent and 50% of Boat Maintenance's supervision salaries. In addition, assum Maintenance service line would reduce sales of the Winter Storage line by 20% and sales of the Boat Fuel & Concessions line by 10%. All other information remains the same. Required: 1. If the Boat Maintenance service line is dropped, what is the contribution margin for the Boat Fuel & Concessions line? For the Winter Storage line? Contribution Margin Winter storage line 1,600,000 Boat fuel & concessions line 720,000 2. Which alternative (keep or drop the Boat Maintenance line) is now more cost effective and by how much? hetween the alternatives. Differential Amount Keep Drop $ $ Contribution margin 2,900,000 2,320,000 580,000 1,105,000 Less: Garage/warehouse rent 895,000 210,000 270,000 Supervision $ $ $ Total relevant benefit (loss) 1,525,000 The company is better off by $ if it keeps the Boat Maintenance line