just the red ones, thank you for your help!

eBook Print Item Variable and Absorption Costing-Three Products 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 Statements-Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $512,400 5322,800 $274,400 Cost of goods sold (266,400) (156,200) (183,800) Gross profit $246,000 $164,600 $90,600 Selling and administrative expenses (211,600) (118,500) (151,300) Operating income $34,400 $46,100 $(60,700) In addition, you have determined the following information with respect to allocated fixed costs Cross Golf Running Training Shoes Shoes Shoes Fixed costs Cost of goods sold $32,000 $42,000 $38,400 Selling and administrative expenses 61.500 38,700 38,400 These fixed costs are used to support all the 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 profit performance of the running shoe line is unacceptable. As a result, it has decided to eliminate the running shoe fine Management does not expect to be able to increase sales in the other two lines. However, as a result of elminating the running shon line management expects the profits of the company to increase by $60, 700 eBook Print Item a. Are management's decision and conclusions correct? Management's decision and conclusion are incorrect The profit will not and selling running shoes will not be avoided if the line is eliminated. be improved because the fixed costs used in manufacturing Foedback Check My Work Consider the impact the elimination of the running shoe line would have on the fixed costs. 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, 2011 Cross Training Shoes Golf Shoes Running Shoes Revenues 512.400 322,800 274.400 Variable cost of goods sold 104.400 116.2007 165400 Manufacturing margin 330,000 X 206.600 Variable selling and administrative expenses 150,100 79,800 -112,900 Contribution margin 179,900 X 126.000 16.100 Fixed costs Fixed manufacturing costs 82,000 42.000 31.400 Fixed selling and administrative expenses -61,500 1.700 30400 129.000 143.500 20.700 76,000 Total fixed costs ignment/take AssignmentMain doinvoker =BtakeAssignmentSessionLocator=&inprogress=false : eBook Print Item VIDERSSUM VOOR TAGS 330,000 X 20,04 129,000 -150,100 -79,800 - 112.900 179,900 X 126,800 16.100 Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs 32.000 42,000 -38,400 61.500 -38,7007 -38.400 - 143.500 -30,700 $ - 76,000 36,400 Operating income (loss) 46,100 60,700 x Feedback Check My Work When recasting the variable costing income statement, remember that under variable costing, all fixed factory overhead costs are deducted in the period incurred. Revenues- Variable Cost of Goods Sold - Manufacturing Margin; Manufacturing Margin - Variable Selling and Administrative Expenses - Contribution Margin: Contribution Margin- (Fixed Manufacturing Costs + Fixed Selling and Administrative Expenses) = Operating income c. Use the report in (b) to determine the profit impact of eliminating the running shoeline, assuming no other changes If the running shoes line were eliminated, then the contribution margin of the product line would be eliminated and the fixed costs would not be eliminated. Thus, the profit of the company would actually decline bys Management should keep the line and attempt to improve the profitability of the product by increasing prices, increasing : volume, or reducing costs Feedback Previous Next Check My Work 4 more Check My Work uses remaining