Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Convay. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total Sales revenue $1,280 $185 $450 $1,915 Less: Variable expenses 1,115 45 360 1,520 Contribution margin $165 $140 $90 $395 Less direct ficxed expenses: Depreciation 50 15 12 77 Salaries 95 85 104 284 Segment margin $20 $40 $(26) $34 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 be eliminated if the associated product were dropped. Required: Conceptual Connection: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Should Petoskey keep or drop Convay?

Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Convay. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total Sales revenue $1,280 $185 $450 $1,915 Less: Variable expenses 1,115 45 360 1,520 Contribution margin $165 $140 $90 $395 Less direct ficxed expenses: Depreciation 50 15 12 77 Salaries 95 85 104 284 Segment margin $20 $40 $(26) $34 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 be eliminated if the associated product were dropped. Required: Conceptual Connection: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Should Petoskey keep or drop Convay?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 43E

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Procedural Coding: CPT and HCPCS

Computer hardware and accessories nowadays support various types of coding for a variety of purposes. Procedural coding is a straightforward process that combines several steps of a calculative sequence to achieve the desired result. It is a type of medical classification that aids in the identification of specific surgical, medical, or diagnostic procedures. It begins as soon as a patient enters the premises of a healthcare provider. These coding systems have significantly aided the process of insurance claims and billing.

Question

please explain

Keep-or-Drop Decision
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
$450
$1,915
Less: Variable expenses
1,115
45
360
1,520
Contribution margin
$165
$140
$90
$395
Less direct fixed expenses:
Depreciation
50
15
12
77
Salaries
95
85
104
284
Segment margin
$(26)
$20
$40
$34
Direct fixed expenses consist
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 be eliminated if the associated product were dropped.
Required:
Conceptual Connection: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000" rather than "15".
Should Petoskey keep or drop Conway?

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