Question: 2.Drop or keep Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring
2.Drop or keep
Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: $250,000 ). All variable costs are relevant. line by 28% and sales of the plank line by 20%. All other information remains the same. Required: 1. If the parquet product line is dropped, what is the contribution margin for the strip line? For the plank line? 2. Which alternative (keep or drop the parquet product line) is now more cost effective and by how much? by
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