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Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segmen and is considering dropping that product line. The

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Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segmen and is considering dropping that product line. The following information is available regarding its canoe segment MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs $2,000,000 Direct materials $ 450,000 Direct labor 500,000 Variable overhead 300,000 Variable selling and administrative 200,000 Total variable costs 1,450,000 Contribution margin 550.000 Fixed costo Direct 375,000 Indirect 300,000 Total fixed costs 675,000 Net Income $(125,000) 1. If canoes are discontinued, calculate the net income lost or gained. Keep the department $ 2,000,000 Eliminate the department Sales Expenses Direct materials Direct labor Variable overhead Variable selling and administrative costs 0 0 450,000 500,000 300.000 200,000 Indirect fixed costs (300,000) ERRAR

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