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Structuring a Keep-or-Drop Product Line Problem A segmented income statement is shown below for snow shovel producer SnoGo Company in thousands of dollars: Ergo Slider Lite Lift Total Sales revenue $350 $290 $250 $890 Less: Variable expenses 300 210 175 685 Contribution margin 50 80 75 205 Less direct fixed expenses: Machine rent (20) (10) (8) (38) Supervision (8) (5) (2) (15) Depreciation 26) 12) (10) (48) Segment margin $ (4 ) $ 53 $ 55 $104 SnoGo's Ergo product line has a contribution margin of $50,000 (sales of $350,000 less total variable costs of $300,000). All variable costs are relevant. Relevant fixed costs associated with this line include $20,000 in machine rent and $8,000 in supervision salaries. Required: 1. List the alternatives that could be considered with respect to the Ergo line (assuming outsourcing is not an option). 2. List the relevant benefits and costs for each alternative. The input in the box below will not be graded, but may be reviewed and considered by your instructor. 3. Which alternative is more cost effective? By how much? $