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 $ 2,100,000 Variable costs Direct materials $ 470,000 Direct labor 520,000 Variable overhead 320,000 Variable selling and administrative 210,000 Total variable costs 1,520,000 Contribution margin 580,000 Fixed costs Direct 395,000 Indirect 320,000 Total fixed costs 715,000 Net income $ (135,000 ) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes?

If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.)

	Keep the department	Eliminate the department
Sales	$2,100,000
Expenses:
Direct materials	470,000
Direct labor	520,000
Variable overhead	320,000
Variable selling and administrative costs	210,000
Direct fixed costs	395,000
Indirect fixed costs	320,000	320,000
Total expenses	2,235,000	320,000
Net income (loss)	$(135,000)	$(320,000)
The canoe division should be:	Kept
If the canoe division is eliminated, income will be:	lower by:	$185,000