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 Hawkeye Shoes Inc. Product Line Income Statement For the Year Ended November 30, 2018 Children's Shoes Men's Shoes Women's Shoes Total $280,000 $300,000 $500,000 $1,000,000 Sales Costs of goods sold: Variable costs $(135,000) (45.000) (150,000) (60.000) $(505,000) (225.000) Feed costs $(220,000) (120,000) $(340,000) $160,000 Total cost of goods sold (180,000) (210,000) 730,000) $350,000 Gross profit $100,000 390,000 Selling and administrative expenses Variable selling and admin, expenses $(100,000) (30,000) (45,000) (20,000) (65,000) ${95,000) (25,000) Fixed selling and admin, expenses (240,000) (75,000) (315,000) Total selling and admin, expenses $(130,000) $(120,000) Operating income (oss) (30,000) $25,000 $40,000 $35,000 Frequired, use a minus sign to indicate a los .. Prepare a differential analysis to determine the flaw in the general manager's decision. If an amount is ere, entro Differential Analysis Contine (ALI) or Discontine ( A3) Ndren's Shoes November 30 Check My Work All work saved Email Instructor Save and Exit Submit Assement for Grading ook Calculator Selling and administrative expenses: Variable selling and admin. expenses Pued selling and admin. expenses Total selling and admin. expenses Operating income (loss) $(100,000) (30,000) (45,000) (20,000) (65.000) $25,000 $(95,000) (25,000) ${120,000) $40,000 $240,000) (75,000) (315,000) $35,000 $130,000) $(30,000) 2. Prepare a differential analysis to determine the flaw in the general manager's decision. If an amount is zero, enter"O. If required, use a minus sign to indicate a loss Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Children's Shoes November 30 Continue Discontinue Children's Shoes Children's Shoes (Arrative 1) (Alternative 2) A Differential Effects rte 2) Variable cost of goods sold Variable selling and a n expenses Pret (Los) b. What is the flow in the decision to discontinue Children's Shoes, assumed costs would not be at lected by the discontinuance If the r e's shoes are discontinued, the company's loss would Check My Work Previous Next All work saved Email Instructor Save and be submit Assignment for Grading