E8-23A (similar to) Top managers of New York Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product :: (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate flooring Read the requirements. Requirement 1. Prepare an incremental analysis to show whether New York Flooring should discontinue the laminate flooring product box if there is no expected change as a result of discontinuing the laminate flooring product in this scenario.) Total Incremental Analysis for Discontinuation Decision Contribution margin lost if laminate flooring product line is dropped Less: Fixed cost savings if laminate flooring product line is dropped Operating income gained laminate flooring is dropped Question Help are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision boring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $24,000 to operating income? Explain. (Enter a "o in an input ing product in this scenario.) Total Check Answer Ick Check Answer. are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following company stops selling laminate flooring, Data Table ntal analysis to show whether N a result of discontinuing the la Hd $24,000 to op -Discontinuation Decision boring product line is dropped Nooring product line is dropped if laminate flooring is drog New York Flooring Product Line Contribution Margin Income Statement For the Year Product lines Sales revenue Wood flooring Laminate flooring Company Total 304,000 $ 124,000 $ 428,000 155,000 78,000 233,000 149,000 $ 46,000 $ 195,000 Less: Variable expenses Contribution margin Less fixed expenses: Manufacturing Marketing and administrative 79,000 50,000 20,000 $ 53,000 17,000 (24.000) $ 132,000 67,000 (4,000) Operating income (loss) Print Done number in the input fields and then click Check Answer. Clear All whether New York Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $24 na the laminate flooring product in this scenario i Requirements 1. Prepare an incremental analysis to show whether New York Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $24,000 to operating income? Explain. 2. Assume that the company can avoid $29,000 of fixed expenses by discontinuing the laminate flooring product line (these costs are direct fixed costs of the laminate flooring product line). Prepare an incremental analysis to show whether the company should stop selling laminate flooring. 3. Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops selling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line (retailers want to buy both from the same supplier). Wood flooring production and sales would decline 10%. What should the company do? Print Done s and then click Check