Variable and Absorption Costing-Three Products Fieet-of-Foot Ine manufactures and selis three types of shoes. The income statements prepared under the absorpbion costing method for the three shoes are as follam: Fleet-of-foot Inc. In addition, you have determined the following information with respect to allocated fired costs: These fixed costs are used to vupport all three product lines and will not change with the elimination of any one product. In qddaion, you have deternined that the elfects of inventory may be ignored. The management of the company has deemed the profit performance of the running shoe line as unacceptable. As a resuit, k hes decided to eliminate the runnibg shoe line. Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the runnimg shce line, managenent exsects the profits of the company to increase by $52,500. b. Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sign. Fleet-ot-Foot inc. Variable Costing Income statements - Three Product Lines merie field c. Use the report in (b) to determine the profit impact of eliminating the running shoe line, assuming no other changes. If the running shoes line were eliminated, then the contribution morgin of the product line would and the fixed cests eliminated. Thus, the proft of the compaty would actually. by 1 Management shodd keep the line and attempt to improve the profitabilty of the product by peicet. velume, or conts