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Exercise 23-13 Income analysis of eliminating departments A1 Marinette Company makes several products, including cances. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. Should management discontinue the manufacturing of cances? Support your decision. MARINETTE COMPANY Income Statement-Canoe Segment $2,000,000 $450,000 500,000 300,000 200,000 Sales Variable costs Direct materials Direct labor. Variable overhead Variable selling and administrative. Total variable costs. Contribution margin Fixed costs Direct Indirect Total fixed costs 1.450.000 550,000 375,000 300,000 675,000 $ (125.000 Net income Check Income impact if canoe segment dropped, $(175,000)