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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 $270 $1,735 Less: Variable expenses 1,115 45 216 1,376 Contribution margin $165 $140 $54 $359 Less direct fioxed expenses: Depreciation 50 15 13 78 Salaries 95 85 112 292 Segment margin $20 $40 $(71) S-11 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. Required: CONCEPTUAL CONNECTION: Estimate the impact on profit that would result from dropping Convay. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Decrease Should Petoskey keep or drop Conway? Кeep

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 $270 $1,735 Less: Variable expenses 1,115 45 216 1,376 Contribution margin $165 $140 $54 $359 Less direct fioxed expenses: Depreciation 50 15 13 78 Salaries 95 85 112 292 Segment margin $20 $40 $(71) S-11 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. Required: CONCEPTUAL CONNECTION: Estimate the impact on profit that would result from dropping Convay. Enter amount in full, rather than in thousands. For example, "15000" rather than "15". Decrease Should Petoskey keep or drop Conway? Кeep

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $270 $1,735 Less: Variable expenses 1,115 45 216 1,376 Contribution margin $165 $140 $54 $359 Less direct fixed expenses: Depreciation 50 15 13 78 Salaries 95 85 112 292 Segment margin $20 $40 $(71) $-11 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. 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". Decrease Should Petoskey keep or drop Conway? Keep
Transcribed Image Text: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 $270 $1,735 Less: Variable expenses 1,115 45 216 1,376 Contribution margin $165 $140 $54 $359 Less direct fixed expenses: Depreciation 50 15 13 78 Salaries 95 85 112 292 Segment margin $20 $40 $(71) $-11 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. 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". Decrease Should Petoskey keep or drop Conway? Keep
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