Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines:

Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $300,000 $400,000 225,000 $200,000 120,000 $900,000 595,000 Less: Variable expenses 250,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (50,000) (20,000) Supervision Depreciation (5,000) (15,000) (35,000) $120,000 (20,000) (10,000) (10,000) $ 40,000 (75,000) (45,000) (70,000) $115,000 (25,000) Segment margin $ (45,000) Hickory's management is deciding whether to keep or drop the parquet product line. Hickory's parquet flooring product line has a contribution margin of $50,000 (sales of $300,000 less total variable costs of $250,000). All variable costs are relevant. Relevant fixed costs associated with this line include 80% of parquet's machine rent and all of parquet's supervision salaries. In addition, assume that dropping the parquet product line would reduce sales of the strip line by 10% and sales of the plank line by 5%. All other information remains the same. Required: 1. If the parquet product line is dropped, what is the contribution margin for the strip line? For the plank line? Strip line Contribution Margin $ 157,500 $ 76,000 - Plank line