Answer:
Profit will reduce by $28,000
Explanation:
The impact on profit that would result from dropping Conway is shown below:-
                             Alanson            Boyne       Conway    Total
Sales revenue      $1,024,000     $185,000       -      $1,209,000
                                ($1,280,000 × 80%)
Less
Variable expenses  $892,000      $45,000         -      $937,000
                                  ($1,115,000 × 80%)
Contribution margin$132,000   $140,000	$ -    $272,000
Less:
Direct fixed expenses
Depreciation          $50,000        $15,000        $10,000  $75,000
Salaries                $95,000        $85,000            $ -       $180,000
Segment margin   ($13,000)     $40,000    ($10,000)  $17,000
Existing Profit                                                                    $45,000
Profit will reduce by                                                        $28,000