Decision to Discontinue a Product On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to discontinue Children's Shoes because it reduced operating income by $30,000. Sales Costs of goods sold: Variable costs Fixed costs Total cost of goods sold Hawkeye Shoes Inc. Product-Line Income Statement For the Year Ended November 30, 20Y8 Gross profit Selling and administrative expenses: Variable selling and admin. expenses Fixed selling and admin. expenses Total selling and admin. expenses Operating income (loss) Children's Shoes Men's Shoes Women's Shoes $280,000 $(135,000) (45,000) $(180,000) $100,000 $(100,000) (30,000) $(130,000) $(30,000) $300,000 $(150,000) (60,000) $(210,000) $90,000 $(45,000) (20,000) $(65,000) $25,000 $500,000 $(220,000) (120,000) $(340,000) $160,000 $(95,000) (25,000) $(120,000) $40,000 Total $1,080,000 $(505,000) (225,000) $(730,000) $350,000 $(240,000) (75,000) $(315,000) $35,000 a. Prepare a differential analysis to determine the flaw in the general manager's decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. O Revenues Costs: Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Children's Shoes November 30 Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (Loss) Continue $ Children's Shoes Children's Shoes (Alternative 1) (Alternative 2) Discontinue $ Differential Effects (Alternative 2) b. What is the flaw in the decision to discontinue Children's Shoes, if it is assumed fixed costs would not be materially affected by the discontinuance? If the children's Shoes are discontinued, the company's loss would by $