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				$	3,400,000
Variable costs
Direct materials	$	730,000
Direct labor		780,000
Variable overhead		580,000
Variable selling and administrative		340,000
Total variable costs					2,430,000
Contribution margin					970,000
Fixed costs
Direct		655,000
Indirect		580,000
Total fixed costs					1,235,000
Net income				$	(265,000	)

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
Expenses:
Total expenses
Net income (loss)	$0	$0

Should management discontinue the manufacturing of canoes?

Should management discontinue the manufacturing of canoes?