Hello! I hope that you will help me with my incorrect answers. I don't get why I got the wrong answer. Also, please give me a short explanation about 2 & 3 and the solution as your answer. Thank you so much! ( Limited time only) (Note: It has different given from similar questions)

Keep-Or-Drop Decision, Altematives, Relevant Costs Reshier Company makes three types of rug shampooers. Model 1 is the basic model rented through hardware stores and supermarkets. Model 2 is a more advanced model with both dry-and wet-vacuuming capabilities. Model 3 is the heavy-duty riding shampooer sold to hotels and convention centers. A segmented income statement is shown below. Model 1 Model 2 Model 3 Total Sales $225,000 $586,000 $657,500 $1,468,500 Less variable costs of goods sold (96,500) (160,120) (350,800) (607,420) Less commissions (6,000) (34,000) (23,750) (63,750) Contribution margin $122,500 $391,880 $282,950 $797,330 Less common fixed expenses: Fixed factory overhead Fixed selling and administrative. (395,000) (287,000) $115,330 Operating income While all models have positive contribution margins, Reshier Company is concerned because operating income is less than 10 percent of sales and is low for this type of company. The company's controller gathered additional information on fixed costs to see why they were so high. The following information on activities and drivers was gathered: Activity Activity Cost Model 3 Engineering Driver Usage by Model Model 2 73 12,700 Activity Driver Engineering hours Setup hours Model 1 800 12,900 13,900 $88,000 178,000 120,000 127 29,127 Setting up Customer service Service calls 1,560 19,127 In addition, Model 1 requires the rental of specialized equipment costing $22,500 per year. Required: 1. Reformulate the segmented income statement using the additional information on activities. Use a minus sign to indicate any negative margins. Do NOT round interim calculations and, if required, round your answer to the nearest dollar. If amount box does not require an entry, leave it blank or enter "0". Reshier Company Segmented Income Statement Model 1 Model 2 Sales Model 3 586,000 225,000 Total 657,500 1,468,500 607,420 Less variable cost of goods sold 160,120 96,500 6,000 350,800 23,750 Less commissions 34,000 63,750 Contribution margin 122,500 391.880 282,950 Less traceable fixed expenses: 70,400 Engineering Setting up Equipment rental 6,424 41,306.85 11,176 94,735.80 22,500 0 5,412.44 0 66,361.35 Customer service 48,226.21 Product margin -60,583.66 338,736.71 110,676.85 Less common fixed expenses: Factory overhead Selling and admin. expense Operating income 41,957.35 797,330 88,000 178,000 22,500 120,000 388,830 106,500 167,000 115,330 2. Using your answer to Requirement 1, assume that Reshier Company is considering dropping any model with a negative product margin. What are the alternatives? Keeping Model 1 or dropping it Which alternative is more cost effective and by how much? (Assume that any traceable fixed costs can be avoided.) Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Dropping Model 1 will add $ -60,583. X to operating income 3. What if Reshier Company can only avoid 164 hours of engineering time and 4,800 hours of setup time that are attributable to Model 1? How does that affect the alternatives presented in Requirement 2? Which alternative is more cost effective and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Keeping Model 1 will add $ -8,954.5: X to operating income