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 $280,000 $300,000 $500,000 Total Sales $1,080,000 Costs of goods sold: Variable costs Fixed costs Total cost of goods sold $(135,000) (45,000) $(180,000) $(150,000) (60,000) $1210,000) $90,000 $(220,000) (120,000) $(340,000) $160,000 $(505,000) (225,000) $(730,000) $350,000 Gross profit $100,000 Selling and administrative expenses Variable selling and admin. expenses Fixed selling and admin. expenses Total selling and admin, expenses Operating income (los) $100,000) (30,000) $(130,000) $(30,000) $(45,000) (20,000) $(65,000) $25,000 $195,000) (25,000) $(120,000) $(240,000) (75,000) $(315,000) $35,000 $40,000 a. Prepare a differential analysis to determine the flow in the general manager's decision. If an amount is zero, enter 'O". If required, use a minus sign to indicate a los Differential Analysis Continue (AR 1) or Discontinue (Alt 2) Children's Shoes November 30 Check My Workmore Check My Work uses remaining Previous Next Emal instructor Save and Et Submit Assignment for Grading Variable selling and admin. expenses Fixed selling and admin. expenses Total selling and admin. expenses Operating income (loss) $(45,000) (20,000) $(100,000) (30,000) $(130,000) $(30,000) $(95,000) (25,000) $(120,000) $40,000 $(240,000) (75,000) $(315,000) $(65,000) $25,000 $35,000 minus sign to indicate a loss a. Prepare a differential analysis to determine the flaw in the general manager's decision. If an amount is zero, enter "o". If required, use Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Children's Shoes November 30 Continue Discontinue Children's Shoes Children's Shoes (Alternative 1) (Alternative 2) Differential Effects (Alternative 2) Revenues Costs: Variable cost of goods sold Variable selling and admin, expenses Fixed costs Proft (Loss) b. What is the flow 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 Check My WC 5 more Check My Work serining Previous Next > Email instruct Save and Exit Submit Assignment for Grading MODAL