Book Decision to Discontinue a Product On the basis of the following data, the general manager of Featherweight Shoes Inc. decided to discontinue Children's Shoes because it reduced income from operations by $17.000 Featherweight Shoes Inc. Product-Line Income Statement For the Year Ended April 30, 20Y8 Children's Shoes Men's Shoes Total Women's Shoes $500,000 $235,000 $300,000 $1,035,000 Sales Costs of goods sold: Variable costs $130,000 $220,000 $150,000 60,000 41,000 $171,000 $500,000 221,000 $221,000 $314,000 120,000 $340,000 $160,000 $210,000 $64,000 $90,000 Fixed costs Total cost of goods sold Gross profit Selling and administrative expenses Variable selling and admin, expenses Fixed selling and admin, expenses Total selling and admin, expenses Income (Loss) from operations $46,000 35,000 $61,000 5(17,000) $45,000 20,000 $65,000 $25,000 $95,000 25,000 $120,000 $186,000 80,000 $266,000 $40,000 $48,000 . Prepare a differential analysis to determine the flow in the general manager's decision. If an amount is zero, enter"O" Use a minus sign to indicate a loss Differential Analysis Continun (Alternative 1) or Discontinue (Alternative children's Shoes book 2. Prepare a differential analysis to determine the flaw in the general manager's decision. It an amount is 2000, enter "0". Use a minus sign to indicate a los Differential Analysis Continue (Alternative 1) or Discontinue (Alternative 2) Children's Shoes Continue Children's Shoes Discontinue Children's Shoes Differential Effect on Income (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs Variable cost of goods sold Variable selling and admin. expenses Faced costs Income (Loss) b. What is the flow in the decision to discontinue Children's Shoes, if it is assumed foved costs would not be materially affected by the discontinuence? The general manager is not focusing on the differential revenues and costs. it the children's Shoes are discontinued, the company's income would decrease v by $ For continue and discontinue alternatives subtract the costs from the revenue Separate variable from fixed costs. Determine the differential effect on income of the revenues, costs, and income (los) by subtracting alternative 1 from alternative 2 Learning Objective