Question Help Top manager of Georgia Flooring are sormed by their operating towns. They are considering dressing the laminate flooring product line. Company accountants have prepared the following analysis to help make a decir Click the con la view the analysis) Total fund cols will not change the company was seling laminate flooring Read their Requirement 1. Prepare an incremental analysis to show whether Georgia Foring should discontinue the laminate flooring productive We discontinuing laminate fooringade 20.000 to operating income? Explan. En an input box if there is no expected change as a result of continuing the late fooring product in this scenario) Incremental Analysis for Discontinuation Decision Total Contribution marginosaminate flooring product line is reed Low Riding in fooring product line is dropped Operating income Choose from yourber in the inputs and then Check Answer parts Clear Check MacBook A 90 8 11 + $ % & ork 6 of 9 (2 complete) They are considering dropping the laminate flooring product line. Company accountants have prepared the - Data Table $28 Georgia Flooring Product Line Contribution Margin Income Statement For the Year Product lines Sales revenue Wood flooring Laminate flooring Company Total $ 302,000 $ 122,000 $ 424,000 159.000 86,000 245,000 Less: Variable expenses $ 143,000 $ 36,000 $ 179,000 Contribution margin Less fixed expenses: Manufacturing Marketing and administrative 79,000 53,000 55.000 7.000 134,000 60,000 11,000 $ (26.000) $ (15.000) Operating income (loss) Print Done and then click Check Answer Clear All MacBook Air by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to y stops selling laminate flooring. ysis to show w! discontinuing the 70 to operating inco Requirements tinuation Decl product line is di product line is a laminate floorin 1. Prepare an incremental analysis to show whether Georgia Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $26,000 to operating income? Explain. 2. Assume that the company can avoid $27,000 of fixed expenses by discontinuing the laminate flooring product line (these costs are direct fixed costs of the laminate flooring product line). Prepare an incremental analysis to show whether the company should stop selling laminate flooring, 3. Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops selling laminate flooring. However, marketing has concluded that wood flooring sales would be adversely affected by discontinuing the laminate flooring line (retailers want to buy both from the same supplier). Wood flooring production and sales would decline 10%. What should the company do? Print Done Ser in the input fields and then click Check Answer. Clear All MacBook Air
