Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 )
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
Total expenses 4,215,000
Net income (loss) $(315,000) $0
The canoe division should be:
If the canoe division is eliminated, income will be:

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Audit Process Principles Practice And Cases

Authors: Iain Gray, Stuart Manson

5th Edition

1408030497, 9781408030493

More Books

Students also viewed these Accounting questions

Question

7 Name at least three selection methods.

Answered: 1 week ago

Question

9 What is meant by the processual approach?

Answered: 1 week ago