Top managers of Maine Flooring are alarmed by their operating losses. They are considering dropping the laminate flcoring product line. Company accountants have prepared the following analysis to help make this decision: (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 Maine 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 box if there is no expected change as a result of discontinuing the laminate flcoring 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 flooring is dropped Maine Flooring Product Line Contribution Margin Income Statement For the Year 1. Prepare an incremental analysis to show whether Maine Flooring should discontinue the laminate fooring product line. Will discontinuing laminate ficoring add $30,000 to operating income? Explain. Assume that the company can avoid $33,000 of fixed expenses by discontinuing the laminate flooring product line (these costs are direct fixed costs of the laminate flooring product line). Prepare an incremental analysis to show whether the company should stop selling laminate fiooring. Now, assume that all of the fixed costs assigned to laminate flooring are direct fixed costs and can be avoided if the company stops selling laminate flooring. However, marketing has concluded that wood fiooring sales would be adversely affected by discontinuing the laminate flooring line (retallers want to buy both from the same supplier). Wood flooring production and sales would decline 10%. What should the company do? 2. Product lines 3. Wood flooring Laminate flooring Company Total Sales revenue Less: Variable expenses Contribution margin Less fixed expenses: 300,000 S 154,000 130,000$ 90,000 430,000 244,000 186,000 40,000 $ 146,000 S Print Done 77,000 52,000 17,000 S 57,000 13,000 (30,000) $ 134,000 65,000 (13,000) Marketing and administrative Operating income (loss)