(Solution) - Refer to the information for Petoskey Company from Exercise 23 -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Refer to the information for Petoskey Company from Exercise 23- 30. Assume that 20 percent 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.
Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows:

Required:
Estimate the impact on profit that would result from dropping Conway. Explain why Petoskey should keep or drop Conway.