HW Score: 68.03%, 4 Score: 0.2 of 1 pt Sof 6 16 complet %E8-23A (similar to) Top managers of Ohio Flooring we warmed by their operating losses. They we considering dropping the laminate fooring product in M(Click the icon to view the analysis) Total fed costs will not change if the company stops selling laminate flooring, Read the requirements Question Company w a nts have prepared the following analysis to help make this decision Requirement 1. Prepare an incremental analysis to show whether One Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $22.000 to operating income? Explain (Entrain anno there is no expected change as a result of discontinuing the laminate fooring product in this scenario.) Incremental Analysis for Discontinuation Decision Data Table Contribution margin lost laminate flooring product line is dropped Le Foxed cost savings if laminate flooring product line is dropped Oh Flooring Operating income i laminate flooring is dropped Product Line Contribution Margin income Statement For the Year Requirements Wood flooring Sevenue Laminate flooring Company Total 120,000 $ 427.009 245.000 Less: Variable expenses Contribution margin Less foed expenses 148.000 5 1. Prepare an incremental analysis to show whether On Flooring should discontinue the laminate flooring product line. We discontinuing laminate flooring add $22.000 to operating income? Explain 2. Assume that the company can avoid $25,000 offed expenses by discontinuing the laminate flooring product line these costs are direct found costs of the laminate flooring product line. Prepare an incremental analysis to show whether the company should stop song minat Booring 3. Now, assume that all of the feed costs assigned to laminate flooring are directed costs and can be avoided if the company stops seling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line retailers want to buy both from the same supplen Wood flooring production and sales would decline 10%. What should the company do? 182,000 Manufacturing 77.000 53,000 47.000 9.000 124.000 62.000 Operating income foss) 18,000 5 22.0001 $ 40001 Done Print Done