for pro EXERCISE 12-10 Dropping or Retaining a Segment [LO2] Dexter Products, Inc., manufactures and sells a number of items, including an overnight case. The company has been experiencing losses on the overnight case for some time, as shown on the lowing contribution format income statement: Dexter Products, Inc. Income Statement-Overnight Cases For the Quarter Ended June 30 $450,000 Sales..... Variable expenses: $130,000 Variable manufacturing expenses. Sales commissions. 48,000 12,000 Shipping.. Total variable expenses. 190,000 260,000 Contribution margin.. Fixed expenses: Salary of product-line manager. 21,000 General factory overhead. 104,000* Depreciation of equipment (no resale value). 36,000 Advertising-traceable.. 110,000 Insurance on inventories. Purchasing department. 9,000 50,000+ Total fixed expenses. 330,000 Net operating loss.. $ (70,000) "Allocated on the basis of machine-hours. Allocated on the basis of sales dollars. Differential Analysis: The Key to Der Discontinuing the overnight cases would not affect the company's sales of its other product lines, its total general factory overhead, or its total purchasing department expenses. Required: Would you recommend that the company discontinue the manufacture and sale of overnight cases? Support your answer with appropriate computations