Variable and Absorption CostingThree Products

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 StatementsAbsorption Costing For the Year Ended December 31, 20Y1
	Cross Training Shoes		Golf Shoes		Running Shoes
Revenues	$405,100		$239,000		$198,400
Cost of goods sold	(210,700)		(117,100)		(132,900)
Gross profit	$194,400		$121,900		$65,500
Selling and administrative expenses	(167,200)		(87,800)		(109,400)
Operating income	$27,200		$34,100		$(43,900)

In addition, you have determined the following information with respect to allocated fixed costs:

	Cross Training Shoes		Golf Shoes		Running Shoes
Fixed costs:
Cost of goods sold	$64,800		$31,100		$27,800
Selling and administrative expenses	48,600		28,700		27,800

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

The management of the company has deemed the profit performance of the running shoe line as unacceptable. As a result, it has decided to eliminate the running shoe line. Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the running shoe line, management expects the profits of the company to increase by $43,900.

Question Content Area

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 StatementsThree Product Lines For the Year Ended December 31, 20Y1

	Cross Training Shoes	Golf Shoes	Running Shoes
Contribution marginManufacturing marginRevenuesVariable cost of goods soldVariable selling expensesRevenues	$Revenues	$Revenues	$Revenues
Contribution marginManufacturing marginRevenuesVariable cost of goods soldVariable selling expensesVariable cost of goods sold	Variable cost of goods sold	Variable cost of goods sold	Variable cost of goods sold
Contribution marginManufacturing marginRevenuesVariable cost of goods soldVariable selling expensesManufacturing margin	$Manufacturing margin	$Manufacturing margin	$Manufacturing margin
Contribution marginManufacturing marginRevenuesVariable cost of goods soldVariable selling and administrative expensesVariable selling and administrative expenses	Variable selling and administrative expenses	Variable selling and administrative expenses	Variable selling and administrative expenses
Contribution marginManufacturing marginRevenuesVariable cost of goods soldVariable selling expensesContribution margin	$Contribution margin	$Contribution margin	$Contribution margin
Fixed costs:
Fixed contribution marginFixed manufacturing costsFixed salesVariable cost of goods manufacturedVariable cost of goods soldFixed manufacturing costs	$Fixed manufacturing costs	$Fixed manufacturing costs	$Fixed manufacturing costs
Fixed selling and administrative expensesFixed manufacturing marginVariable cost of goods manufacturedVariable cost of goods soldVariable selling and administrative expensesFixed selling and administrative expenses	Fixed selling and administrative expenses	Fixed selling and administrative expenses	Fixed selling and administrative expenses
Total fixed costs	$fill in the blank ee3839fa1015048_29	$fill in the blank ee3839fa1015048_30	$fill in the blank ee3839fa1015048_31
Operating income (loss)	$fill in the blank ee3839fa1015048_32	$fill in the blank ee3839fa1015048_33	$fill in the blank ee3839fa1015048_34