N 2 Service Line Deletion - Assume contribution margin was consistent for each product for the past three years. Numbers are in thousands Radiology OBGYN - . Surgery Trauma Rehab Description Service Total $ 1,400$ 575 1,975$ 1,200 $ 900 2,100 S 2,300 $ 1,500 3,800 $ 4,500 $ 1,000 5,500S 1.200 S 10,600 2,300 6,275 3,500S 16,875 $ S Revenue Scranton Wilkes Barre e Total Revenue B Variable Costs Flex Labor Costs of Goods sold - Supplies 3 Total Variable Cost Contribution Margin ) 1 Fixed Costs 2 Net Income/Loss 3 2 400 S 500 100 1,000 $ 975$ 400S 650 60 1,110 S 990S 1,200 $ 700 100 2,000 $ 1,800 $ 3,500S 1,600 1,200 6,300S (800) S 900S 6,400 1,400 4,850 800 2,260 3.100 S 13,510 400 S 3,365 $ $ $ $ 450 S 525 S 325S 665 $ 475 S 1,325 $ 500S (1,300 S 450 S (50) S 2,200 1,165 1) Assuming fixed costs remain constant for a three (3) year period, decide on which servicet you would delete (if any) to increase profit margin (net income) 7 3 3 ) 1 2 2) Based on your determiniation, delete the service(s) you decided on, equally distribute the fixed costs to the other service 3 line that you have maintained and calculate the new profit. 4 5 5 7 3.3) What other critical review needs to be considered before deleting a service line even though the contribution margin may be negative 9 N 2 Service Line Deletion - Assume contribution margin was consistent for each product for the past three years. Numbers are in thousands Radiology OBGYN - . Surgery Trauma Rehab Description Service Total $ 1,400$ 575 1,975$ 1,200 $ 900 2,100 S 2,300 $ 1,500 3,800 $ 4,500 $ 1,000 5,500S 1.200 S 10,600 2,300 6,275 3,500S 16,875 $ S Revenue Scranton Wilkes Barre e Total Revenue B Variable Costs Flex Labor Costs of Goods sold - Supplies 3 Total Variable Cost Contribution Margin ) 1 Fixed Costs 2 Net Income/Loss 3 2 400 S 500 100 1,000 $ 975$ 400S 650 60 1,110 S 990S 1,200 $ 700 100 2,000 $ 1,800 $ 3,500S 1,600 1,200 6,300S (800) S 900S 6,400 1,400 4,850 800 2,260 3.100 S 13,510 400 S 3,365 $ $ $ $ 450 S 525 S 325S 665 $ 475 S 1,325 $ 500S (1,300 S 450 S (50) S 2,200 1,165 1) Assuming fixed costs remain constant for a three (3) year period, decide on which servicet you would delete (if any) to increase profit margin (net income) 7 3 3 ) 1 2 2) Based on your determiniation, delete the service(s) you decided on, equally distribute the fixed costs to the other service 3 line that you have maintained and calculate the new profit. 4 5 5 7 3.3) What other critical review needs to be considered before deleting a service line even though the contribution margin may be negative 9