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Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows:

	Alanson	Boyne	Conway	Total
Sales revenue	1,280	185	300	1,765
Less: Variable expenses	1,115	45	225	1,385
Contribution margin	165	140	75	380
Less: direct fixed expenses:
Depreciation	50	15	10	75
Salaries	95	85	80	260
Segment margin	20	40	(15)	45

Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold.

Refer to the information for Petoskey Company above. Assume that each of the three products has a different supervisor whose position would remain if the associated product were dropped.

Required:

1. Conceptual Connection Estimate the impact on profit that would result from dropping Conway. Explain why Petoskey should keep or drop Conway.

   Refer to the information for Petoskey Company above. Assume that each of the three products has a different supervisor whose position would be eliminated if the associated product were dropped. Exercise 8-44.

   Required:

2. Conceptual Connection Estimate the impact on profit that would result from dropping Conway. Explain why Petoskey should keep or drop Conway.

   Refer to the information for Petoskey Company from Exercise 8-44. Assume that 20% of the Alanson customers choose to buy from Petoskey because it offers a full range of products, including Conway. If Conway were no longer available from Petoskey, these customers would go elsewhere to purchase Alanson.

   Required:

3. Conceptual Connection Estimate the impact on profit that would result from dropping Conway. Explain why Petoskey should keep or drop Conway.

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