Which alternative is more cost effective and by how much?

Sales revenue Less: Variable expenses Contribution margin Cess direct fixed expenses: Machine rent Supervision Depreciation Segment margin Strip $400,000 225,000 $175,000 5,000 15,000 35,000 $120,000 Plank $200,000 120,000 $ 80,000 20,000 10,000 10,000 $ 40,000 Parquet $300,000 250,000 $ 50,000 50,000 20,000 25,000 $ (45,000) Total $900,000 595,000 $305,000 75,000 45,000 70,000 $115,000 Hickory's management is deciding whether to keep or drop the parquet product line. Hickory's parquet flooring 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 80% of parquet's machine rent and all of parquet's supervision salaries. Required: 1. List the alternatives being considered with respect to the parquet flooring line, Keep th+kqfflooinq Iin@6F+6p It 2. List the relevant benefits and costs for keeping the parquet flooring line. Sales, variablQOst, supervision cost and machine rent 3. Which alternative is more cost effective? Check My Work Previous