These fixed costs are used to support all three product lines and will not change with the climination of any one product. In addition, you have determined that the effects of inventory may be ionored. The management of the company has deemed the profit performance of the running shoe line as unacceptable. As a result, it has decided to eliminate the running shoe line. Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the runnino shoe line, management expects the profits of the company to increase by $41,500. a. Are management's decision and condusions correct? Management's decsion and conclusion are manufacturing and selling running shoes . The profit be avoided if the line is eliminated. be improved because the fixed costs used in Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc, In addition, you have determined the following information with respect to allocated fixed costs: These fixed costs are used to support all three product lines and will not change with the elimination of any one product. In addition, you have Variable Costing Income Statements-Three Product Lines c. Use the report in (b) to determine the profit impact of eliminating the running shoe line, assuming no other changes: If the running shoes line were eliminated, then the contribution margin of the product line would and the fixed costs be eliminated, Thus, the profit of the company would actually by 3 Management should keep the line and attempt to improve the profitability of the product by prices, volume, or costs