Exercise 23-13 Income analysis of eliminating Departments LO A1 Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. (Leave no cells blank. Enter zeros where appropriate.) $3,800,000 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $ 810,000 Direct labor 860,000 Variable overhead 660,000 Variable selling and administrative 380,000 Total variable costs Contribution margin Fixed costs Direct 735,000 Indirect 660,000 Total fixed costs Net income 2,710,000 1,090,000 1,395,000 $ (305,000) 1. If canoes are discontinued, calculate the net income lost or gained. S Keep the department Eliminate the department Sales Expenses: Total expenses Net income (loss) 2. Should management discontinue the manufacturing of canoes? Yes No