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 Costing For the Year Ended December 31, 2011 Cross Training Shoes Golf Shoes Running Shoes Revenues $504,100 $292,400 $248,500 Cost of goods sold (262,100) (143,300) (166,500) Gross profit $242,000 $149,100 $82,000 Selling and administrative expenses (208,100) (107,400) (136,900) Operating Income $33,900 $41,700 $(54,900) In addition, you have determined the following information with respect to allocated fixed costs: Cross Training Golf Running Shoes Shoes Shoes Fixed costs: Cost of goods sold $80,700 $38,000 $34,800 Selling and administrative expenses 60,500 35,100 34,800 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 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 Statements-Three Product Lines For the Year Ended December 31, 2041 Cross Training Shoes Golf Shoes Running Shoes > Fixed costs: Total fixed costs Operating income (loss) 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 margin of the product line would be eliminated and the fixed costs would not be eliminated. Thus, the profit of the company would actually decline by $ Management should keep the line and attempt to improve the profitability of the product by increasing prices, increasing volume, or reducing costs