When MrDing L $\text { Product Lines }$ *These Traceable Expenses Could Be Eliminated If the Product Lines

Essay

When Mr.Ding L.Berry,president and chief executive of Berry,Inc.,first saw the segmented income statement below,he flew into his usual rage: "When will we ever start showing a real profit? I'm starting immediate steps to eliminate those two unprofitable lines!"
$\text { Product Lines }$
$\begin{array}{|l|r|r|r|r|}\hline & \text { Total } & \text { U } & \text { V } & \text { W } \\\hline \text { Sales } & \$ 250,000 & \$ 100,000 & \$ 75,000 & \$ 75,000 \\\hline \text { Variable expenses } & \$ 119,000 & \$ 37,500 & \$ 35,000 & \$ 47,000 \\\hline \text { Contribution margin } & \$ 131,000 & \$ 63,000& \$ 40,00 0 & \$ 28,000 \\\hline \text { Traceable fixed expenses* } & \$ 98,000 & \$ 31,00 & \$ 37,000 & \$ 30,000 \\\hline \text { Common expenses, allocated } & \$ 32,900 & \$ 18,000& \$ 10,500 & \$ 4,400 \\\hline \text { Operating income (loss) } & \$ 100 & \$ 14,000 & \$(7,500) & \$(6,400) \\\hline\end{array}$
*These traceable expenses could be eliminated if the product lines to which they are traced were discontinued.
Required:
Recommend which segments,if any,should be eliminated.Prepare a report in good form to support your answer.