Top managers of Carolina Flooring we alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision Click the icon to view the analysis Total food costs will not change if the company stops soling laminate flooring Read the requirements Requirement 1. Prepare an incremental analysis to show whether Carolina Flooring should discontinue the laminate flooring product line. We discontinuing laminate fooning add $24,000 to operating income? Explain (Enter in an input field of there is no expected change as a result of discontinuing the laminate flooring product in this scenario) Incremental Analysis for Discontinuation Decision Total Contribution margin lost it laminate flooring product one is dropped Less Fixed cost savings if luminate flooring product line is dropped Operating income laminate flooring is dropped Requirements 1. Prepare an incremental analysis to show whether Carolina Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $24,000 to operating income? Explain 2. Assume that the company can avoid $28,000 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 directed 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 5 304,000 $ 155,000 $49.000 5 122.000 5 74.000 426.000 229.000 197.000 $ 48.000 5 Sales revenue 7 Less: Variable expenses & Contribution margin 9 Lens fixed expenses 10 Manufacturing 11 Marketing and administrative 12 Operating income foss) 75,000 53 000 57.000 15.000 124,000) 132.000 58000 (3,000) S 21,000 $ Print Done