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 Total Plank Parquet $400,000 $900,000 $200,000 Sales revenue $300,000 225,000 250,000 120,000 Less: Variable expenses $175,000 Contribution margin 80,000 50,000 $305,000 Less direct fixed expenses: (20,000) (75,000) Machine rent (5,000) (50,000) (20,000) Supervision (10,000) (45,000) (15,000) (10,000) (35,000) (25,000) (70,000) Depreciation $115,000 $120,000 40,000 (45,000) Segment margin keep parquet product line. Hickory's parquet flooring product line has a contribution Hickory's management is deciding whether to or drop the 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