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Business | Business & Finance homework help

Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows:

Sales revenue$1,280$185$300$1,765
Less: Variable expenses1,115452251,385
Contribution margin$165$140$75$380
Less direct fixed expenses:
Segment margin$20$40($15)$45

Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would remain if the associated product were dropped.

Estimate the impact on profit that would result from dropping Conway.


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