Exercise 23-8 Income analysis of eliminating departments LO P4 5 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 $2,500,000 5426 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $ 550,000 Direct labor 600,000 Variable overhead 480,000 Variable selling and administrative 250,000 Total variable costs Contribution margin Fixed costs Direct 475,000 Indirect 400,000 Total Fixed costs Net Income DOR 1,800,000 700,000 225.000 5 (175,000) 1. If canoes are discontinued, calculate the net income lost or gained 2. Should management discontinue the manufacturing of canoes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) 12 Keep the department Eliminate the department Sales Expenses Total expenses Net income (loss) Reme Required 2 > 2 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should management discontinue the manufacturing of cances? Should management discontinue the manufacturing of canoes?