Structuring a Keep$-$or$-$Drop Product Line Problem

Shown below is a segmented income statement for Orzo Company's three laminated flooring product lines:

Sales revenue

Less: Variable expenses

Contribution margin

Less direct fixed expenses:

$$34,000$ in machine rent and $$4,800$ in supervision salaries.

Required:

List the alternatives being considered with respect to the parquet flooring line.

Drop the parquet flooring line or keep it $$

List the relevant benefits and costs for keeping the parquet flooring line.

Sales, variable cost, supervision cost and machine rent $$

Which alternative is more cost effective and by how much?

Keep $$ by