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 StatementCanoe Segment
Sales				$	3,900,000
Variable costs
Direct materials	$	830,000
Direct labor		880,000
Variable overhead		680,000
Variable selling and administrative		390,000
Total variable costs					2,780,000
Contribution margin					1,120,000
Fixed costs
Direct		755,000
Indirect		680,000
Total fixed costs					1,435,000
Net income				$	(315,000	)

1. If canoes are discontinued, calculate the net income lost or gained.

	Keep the department	Eliminate the department
Sales	$3,900,000
Expenses:
Direct materials	830,000
Direct labor	880,000
Variable overhead	680,000
Variable selling and administrative costs	390,000
Direct fixed costs	755,000
Indirect fixed costs	680,000	680,000
Total expenses	4,215,000	680,000
Net income (loss)	$(315,000)	$(680,000)
The canoe division should be:	Eliminated
If the canoe division is eliminated, income will be:	higher by: