Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product Strip Plank Parquet Total Sales revenue $400,000 $300,000 $300,000 $900,000 Less: Variable expenses 225.000 120.000 150.000 195,000 Contribution margin $175,000 $80,000 $50,000 $305,000- Less direct fixed expenses Machine rent (5.000) (20,000) (30,000) (55,000) Supervision (15,000) (10,000) (5.000) (30,000) Depreciation (35,000) (10000) (23,000) (70,000) Segment margin $120,000 $40,000 (10,000) $150,000 Hickory's management is deciding whether to keep or drop the parquet product line. Hickory's parquet ning product line has a contribution margin of $50,000 (sales of $300,000 less total variable costs of $250,000). All variable costs are relevant Relevant fixed costs associated with this line include of parts machine rent and all of parquet's supervisios salarios. In addition, that dropping the product would reduce sales of the strip line by 20% and sales of the plank Sine by 20% All other information remains the same Required 40,250 x For the plank n 21.000 2. Which allamative (keep or drop the pet radt See more cost effective and by how much? 36,000 x