My Home x CengageNOWv2 | ( x Final Group Project X Mail - Frank Sajdak X + takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false OF Paused Total selling and admin. expenses $(130,000) $(65,000) $(120,000) $(315,000) Operating income (loss) $ (30,000) $25,000 $40,000 $35,000 a. Prepare a differential analysis to determine the flaw in the general manager's decision. If an amount is zero, enter "0", If required, use a minus sign to indicate a loss. Differential Analysis Continue (Alt. 1) or Discontinue (Alt. 2) Children's Shoes November 30 Line Item Description Continue Children's Discontinue Children's Differential Effects Shoes (Alternative 1) Shoes (Alternative 2) ( Alternative 2) Revenues $ Costs: Variable cost of goods sold Variable selling and admin. expenses Fixed costs Profit (loss) b. What is the flaw in the decision to discontinue Children's Shoes, if it is assumed fixed costs would not be materially affected by the discontinuance? If the children's Shoes are discontinued, the company's loss would by s Check My Work Previous Next NO w UP T 12:16 8/10/2 Insert 9My Home x CengageNOWv2 | ~ x | Final Group Project X Mail - Frank Sajdak x V OWv21 X + Vilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false OF Paused On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to discontinue Children's Shoes because it reduced operating income by $30,000. Hawkeye Shoes Inc. Product-Line Income Statement for the Year Ended November 30, 20Y8 Children's Shoes Men's Shoes Women's Shoes Total Sales $280,000 $300,000 $500,000 $1,080,000 Costs of goods sold: Variable costs $(135,000) $(150,000) $(220,000) $ (505,000) Fixed costs (45,000) (60,000) (120,000) 225,000) Total cost of goods sold $(180,000) $(210,000) $ (340,000) $(730,000) Gross profit $100,000 $90,000 $160,000 $350,000 Selling and administrative expenses: Variable selling and admin. expenses $(100,000) $(45,000) $(95,000) $(240,000) Fixed selling and admin. expenses (30,000) (20,000) (25,000 (75,000 Total selling and admin. expenses $(130,000) $(65,000) $(120,000 $(315,000) Operating income (loss) $(30,000) $25,000 $40,000 $35,000 a. Prepare a differential analysis to determine the flaw in the general manager's decision. If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Check My Work Previous Next 12:16 P 8/10/202