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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

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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 Sales Variable conts 3,200,000 Direct materials Direct labor Variable overhead Variable selling and administrative 690,000 740,000 40,000 320,000 Total variable costs Contribution margin Pixed eosts 2,290,000 910,000 Direct 615,000 540,000 Indirect Total fixed coets 1.155,000 (245,000) Net income 1. If canoes are discontinued, calculate the net income lost or gained Keep the Eliminate the Sales 3,200,000 Direat materials Direct labor 90,000 740.000 40.00 20,000 615,000 overhead selling and Direct fixed oost ndirect fixed cost 540,000 Total expenses 2,905,000 540,000 Keep the Eliminate the Sales S 3,200,000 Direct materials Direct labor 690,000 740,000 540,000 320,000 615,000 Variable selling and administrative costs Direct fixed costs ndirect fixed costs 540,000 2,905,000 295,000(540,000) Total expenses Net income (loss) 540,000 The canoe division should be: If the canoe division is eliminated, income will be: higher by 2. Should management discontinue the manufacturing of canoes? No O Yes

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