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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

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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-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 1,870.000 Contribution margin 730,000 Yixed costs Direct 495,000 Indirect 420.000 Total Fixed cost 915,000 Het income (185,000) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? 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.) Keep the department Eliminate the department Sales Expenses: Total expenses Not income foss) Reguld Required 2 > 260,000 1,870,000 730,000 Variable selling and administrative Total variable costs Contribution margin Fixed costs Direct Indirect Total fixed costs Net income 495,000 420,000 915,000 $ (185,000) 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 Should management discontinue the manufacturing of canoes? Should management discontinue the manufacturing of canoes?

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