I' Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statement-jiAhsorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $556,500 $339,500 $285,200 Cost of goods sold (209,400) (166,400) (191,100) Gross prot $267,100 $173,100 $94,100 Selling and administrative expenses (229,700) (124,600) (157,100) Operating income $37,400 $48,500 $(63,000) In addition, you have determined the following information with respect to allocated xed costs: Cross _ _ _ Golf Runnlng Tralnlng Shoes Shoes Shoes Fixed costs: Cost of goods sold $89,000 $44,100 $39,900 Selling and administrative expenses 66,800 40,?00 39,900 These xed costs are used to support all three product lines and will not change with the elimination of any one product. In addition, you have determined that the effects of inventory may be ignored. The management of the company has deemed the prot performance of the running shoe line as unacceptable. As a result, it has decided to eliminate the running shoe line. Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the running shoe line, management expects the profits of the v b. Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sign. Winslow Inc. Variable Costing Income Statements-Three Product Lines For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes $ $ Fixed costs: 1000 0 10080 0 Total fixed costs Operating income (loss) c. Use the report in (b) to determine the profit impact of eliminating the running shoe line, assuming no other changes. If the running shoes line were eliminated, then the contribution margin of the product line would and the fixed costs be eliminated. Thus, the profit of the company would actually by $ . Management should keep the line and attempt to improve the profitability of the product by prices, volume, or costs.Pacific Pounder 0 1,390 a. Prepare a contribution margin by sales territory report. Compute the contribution margin ratio for each territory as a whole percent, rounded to two decimal places, if required. Coast to Coast Surfboards Inc. Contribution Margin by Territory East Coast West Coast I gamma Contribution margin ratio \"/0 % mm b. What advice would you give to the management of Coast to Coast Surfboards regarding the relative profitability of the two territories? The total contribution margln is V for the East Coast, while the contribution margin ratio is ' for West Coast. This is because East Coast sells only Atlantic Wave, which have a ' contribution margin ratio but a ' contribution margln per unit. In attempting to improve the company's profitabllity, it is V that changing the mix of products to the two territories will have much effect. In addition, the variable selling expenses per unlt for the ' may be too high