13)

Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment.

MARINETTE COMPANY Income StatementCanoe Segment
Sales		$1,940,000
Variable costs
Direct materials	$510,000
Direct labor	430,000
Variable overhead	400,000
Variable selling and administrative	290,000
Total variable costs		1,630,000
Contribution margin		310,000
Fixed costs
Direct	355,000
Indirect	370,000
Total fixed costs		725,000
Net income		$(415,000)

1.	If canoes are discontinued, calculate the net income lost or gained.