eBook Variable and Absorption Costing-Three Products Kobeer Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows Kobeer Inc. Product Income Statements-Absorptlon Costing For the Year Ended December 31, 2014 Basketbalss Tralning Running Shoes Shoes Shoes $696,000 360,000 $336,000 288,000 $ 48,000 $588,000 504,000 336,000 Revenues Cost of goods sold Gross profit. Selling and administrative expenses Income from operations 288,000 300,000 168,000 216,000 $84,000 282,000 (114,000) In addition, you have determined the following information with respect to allocated fixed costs Basketbalss Training Running Shoes Shoes Shoes Fixed costs: Cost of goods sold $108,000 84,000 $78,000 72,000 $96,000 96,000 Selling and administrative expenses These fixed costs are used to support all three product lines. In addition, you have determined that the inventory is negligible The management of the company has deemed the profit performance of the running shoe line as unacceptable. As a result, it has decided to eliminate the running shoe line. Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the running shoe line, management expects the profits of the company to increase by $114,000