Question 3 4 / 12 points A shoe manufacturer has three product lines: Walking, Running and Hiking shoes. Sales of the Hiking Shoe line have declined due to increase competition and the company is considering two options. Option 1: drop the Hiking Shoe line, or Option 2: Add a new line of Skater Shoes. Price, cost and expected sales data are as follows: Price Variable cost/unit Fixed costs Number of units Walking Running Hiking Skater $90 $45 $65 $40 $50 $40 $35 $43 $200,000 10,000 $210,000 15,000 $50,000 2,500 $200,000 25,000 *100% of the fixed costs are avoidable if a product line is dropped. Required: Evaluate and conclude on both options and make an overall recommendation on how the company should proceed. Show calculations using relevant amounts to support your answer. (12 marks)