Exercise 23-8 Income analysis of eliminating departments LO P4

Exercise 23-8 Income analysis of eliminating departments LO P4 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. MARINETTE COMPANY Income statement-Cance Segment $3,900,000 $ 830,000 880,000 680,000 390,000 Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative Total variable costs Contribution margin Fixed costs Direct Indirect Total fixed costs Net income 2,780,000 1,120,000 755,000 680,000 1,435,000 $ (315,000) 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 Complete this question by entering your answers in the tabs bew. Required 1 Required 2 If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) Keep the department Eliminate the department Sales Expenses Total expenses Net income (loss) (Required 1 Required 2 > InteCL OOUUUU Total fixed costs Net income 1.435,000 $ (315,000) 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 11 Required 2 Should management discontinue the manufacturing of canoes? Should management discontinue the manufacturing of canoes?