c. Use the report in (b) to determine the profit impact of eliminating the running shoes line, assuming no other changes.

If the running shoes line were eliminated, then the contribution margin of the product line would be eliminated and the fixed costs would not be eliminated. Thus, the profit of the company would actually decline by_________________ $. Management should keep the line and attempt to improve the profitability of the product by increasing prices, increasing volume, or reducing costs.

Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements-Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues Cost of goods sold Gross profit Selling and administrative expenses Income (loss) from operations In addition, you have determined the following information with respect to allocated fixed costs: $436,400 226,900 $209,500 180,200 $29,300 $261,800 128,300 $133,500 96,100 $37,400 $227,800 152,600 $75,200 125,600 $(50,400) Cross Training Shoes Golf Running Shoes Shoes Fixed costs: Cost of goods sold $69,800 $34,000 $31,900 Selling and administrative expenses 52,400 31,400 31,900 These fixed costs are used to support all three product lines. In addition, you have determined that the inventory is negligible