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Shown below is a segmented income statement for Mullett Marina's three main boating service lines: Structuring a Keep-or-Drop Product-Line Problem with Complementary Effects Refer to
Shown below is a segmented income statement for Mullett Marina's three main boating service lines: Structuring a Keep-or-Drop Product-Line Problem with Complementary Effects Refer to the information for Mullett Marina above. 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, assume that dropping the Boat 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? 2. Which alternative (keep or drop the Boat Maintenance line) is now more cost effective and by how much
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