om Cengage Learning Microsoft Edge mentMain.do?invoker assignments&takeAssignmen

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om Cengage Learning Microsoft Edge mentMain.do?invoker assignments&takeAssignmentSessionLocator; assignment-take&inprogress; false Alanson Boyne Conway Total $1,280 $185 $345 $1,810 241 1,401 $409 Sales revenue 1,115 45 Less: Variable expenses Contribution margin Less direct fixed expenses: $165 $140 $104 12 15 85 $20 $40 (20) Depreciation 50 95 112 292 Salaris $40 Segment margin Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would remain if the Required: al 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 v Previous Next 0 more Check My Work uses remaining Save and Exit Submit Assignment for Grading All work saved 1002 PM 12/5/2017

Explanation / Answer

since none of the direct fixed cost is avoidable with drop of any product ,It will continue to be incurred .

Dropping of product Conway will result in 0 contribution margin as there will be no sales ,however fixed cost associated will continue to be incurred resulting in loss of (112+12)= ($ 124 ) from conway division .

So Profit will decrease by [124-20 before] = $ 104 with drop of conway

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