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 segme and is considering dropping that product line. The following information is available regarding its canoe segment. MARINETTE COMPANY Income Statement-Canoe Segment Sales $2,600,000 Variable costs Direct materials $570,000 Direct labor 620,000 Variable overhead 420,000 Variable selling and administrative 260,000 Total variable costs Contribution margin 1,870,000 730,000 Fixed costs Direct Indirect 495,000 420,000 Total fixed costs 915,000 Net income $ (185,000) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) Sales Expenses Total expenses Keep the Eliminate the department department Net income (loss) $ 0 $