Top managers of Rhode Island Flooring are warmed by their operating losses. They are considering dropping the laminate fooring product line. Company countries have prepared the following is to help make the decision Click the icon la view the analys) Total and conts will not change if the company losslingente flooring Read the resume Requirement. 1. Pempore an incremental analysis to show whether Frode liland Portng should deconnue the laminate flooring produd ine wa dhaontinuing intimate teening add $31.000 to operating income? Fuglein (Prova PL fuld there is no expected change as a result of discontinuing the faminate flooring product in this one) Incremental Analysis for Discontinuation Decision Total Contribution marginio laminate flooring production is dropped Les Feed cont wings laminate flooring product in dropped Operating income I am Gooring in dropped i Requirements 1. Prepare an incremental analysis to show whether Rhode Island Flooring should discontinue the laminate flooring product line. Will discontinuing laminate flooring add $31,000 to operating income? Explain. 2. Assume that the company can avoid $36,000 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 0 Data Table A B D 1 Rhode Island Flooring Product Line Contribution Margin Income Statement N 3 For the Year 4 5 6 Sales revenue 7 Less: Variable expenses 8 Contribution margin 9 Less fixed expenses: 10 Manufacturing Product lines Laminate Wood flooring flooring Company Total $ 303,000 $ 134,000 $ 437,000 152,000 90,000 242,000 151,000 $ 44,000 $ 195,000 A 74,000 53,000 62,000 13,000 11 Marketing and administrative 136,000 66,000 (7,000) 12 Operating income (loss) 24,000 $ (31,000) $ sar Print Done