Lambert, Inc. manufactures several types of accessories. For the year, the knit hats and scarves line had sales of $400,000, variable expenses of $310,000, and fixed expenses of $120,000. Therefore, the knit hats and scarves line had a net loss of $30,000. If Lambert eliminates the knit hats and scarves line, $20,000 of fixed costs will remain. Prepare an analysis showing whether the company should eliminate the knit hats and scarves line. Eliminate Sales Variable costs Contribution margin Fixed costs Net income Continue $400,000 310,000 90,000 120,000 $(30,000) Net Income Increase (Decrease) $(400,000) 310,000 (90,000) 100,000 $ 10,000 20,000 $(20,000) se incremental analysis for special-order decision. LO 2), AN E7-2 Gruden Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20,000 golf discs is: Materials $ 10,000 Labor 30,000 Variable overhead 20,000 Fixed overhead 40,000 Total $100,000 Gruden also incurs 5% sales commission ($0.35) on each disc sold