Variable and Absorption Costing$-$Three Product

Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows:

Winslow Inc.

Product Income Statements$-$Absorption Costin

These fixed costs are used to support all three product lines and will not change with the elimination of any one product. In addution, you have determined that the effects of irventory may be ignored.

a$.$ Are management's decision and conclusions correct?

Management's decision and conclusion are incorrect $.$ The profit will not $$ be improved because the fixed costs used in manufacturing and selling running shoes will not $$ be avoided if the line is eliminated

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CHeck My Wort

b$.$ Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sign.

Winslow Inc

Variable Costing Income Stateme$-$Three Product Lines PLEASE SHOW YOUR WORK AND HOW YOU DID THE MATH TO THE ANSWERS I WANT TO USE THIS AS A GUIDE