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Keep or Drop a Product Line Petoskey Company produces three products: Alanson, Boyne, and Conway....

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Keep or Drop a Product Line Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total Sales revenue $1,280 $185 $330 $1,795 Less: Variable expenses 1,115 $165 45 $140 248 $82 1,408 $387 Contribution margin Less Fixed Costs: Corporate Fixed Cost Allocation Direct Fixed Costs 13 78 50 95 15 85 108 288 Segment margin $20 $40 $(39) $21 Total corporate fixed costs will not change even if Conway is dropped. Direct fixed costs of Conway can be avoided if Conway is dropped. Assume that 20% of the Alanson customers choose to buy from Petoskey because it offers a full range of products, including Conway. If Conway were no longer available from Petoskey, these customers would go elsewhere to purchase Alanson. Click Save and submit to save and submit. Click Save All Answers to save all answers. Save All Answers

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