Top managers of Georgia Flooring are alarmed by their operating losses. They are considering dropping the laminate flooring product line. Company a B! (Click the icon to view the analysis.) Total fixed costs will not change if the company stops selling laminate flooring. Read the requirements. Requirement 1. Prepare an incremental analysis to show whether Georgia Flooring should discontinue the laminate flooring product line. Will discontin expected change as a result of discontinuing the laminate flooring product in this scenario.) Incremental Analysis for Discontinuation Decision Total Contribution margin lost if laminate flooring product line is dropped Less: Fixed cost savings if laminate flooring product line is dropped Operating income if laminate flooring is dropped ing losses. They are considering dropping the laminate flooring product line. Company accountants have prepared the following analysis to help make this decision: aminate flooring hether Georgia Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $30,000 to operating income? Explain. (Enter a "0" in an input field if there is no eoring product in this scenario.) ision Total ropped dropped hy ng is dropped Clear all Check answer their operating loss Data table cops selling laminate A B Georgia Flooring NS 2. Product Line Contribution Margin Income Statement For the Year operat is to show whether Ge e laminate flooring prod 3 4 Product lines Laminate Wood flooring flooring Company Total 306.000 $ 122,000 $ 428,000 inuation Decision oduct line is dropped 6 Sales revenue S 159,000 78,000 237,000 roduct line is dropped 7 Less: Variable expenses $ 147,000 $ 191,000 44,000 $ aminate flooring is dropp 8 Contribution margin 9 Less fixed expenses: 74.000 61,000 135,000 10 Manufacturing 57 000 13,000 70,000 11 Marketing and administrative 16.000 $ $ (14,000) (30,000) $ 12' Operating income (loss) Print Done Requirements how whe nate floo on Decisi ine is drop 1. Prepare an incremental analysis to show whether Georgia Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $30,000 to operating income? Explain. 2. Assume that the company can avoid $31,000 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 co luded 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? line is drd Le flooring Print Done