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:

Vand Arompen Costing-three Products Window the manufactures and as the types of thos. The incontestatement prepared under the absorption conting method for the teethon are as follower Winslow Inc. Product Income Statements Alcorption Costing For the Year Ended December 31, 2011 Cross Training Shoes Golf Shoes Running Shoes Revenues 5437,500 5258,300 $219,600 Cost of goods sold 0227,700) (126.600) (147.100) Grosso 5210 100 $131,700 $72.500 Selling and administrative expenses (180,700) (95,600) (121,100) Operating income $9.400 336,900 5145.600) In addition, you have determined the following information with respect to allocated fored costs Cross Gold Running Training Shoes Shoes Shoes Fixed costs Cost of goods som $70,000 $30,000 $30,700 Selling and administrative expenses 52.500 31.000 30,700 These foed costs are used to support all the product lines and will not dunget with the motion of any product. In to you have determined that the effects of inventory may be goed The management of the company has deemed the profit performance of the running shoe les acceptable. As a result has decided to climate the running shoe Mainment does not expects in the themes on the Check My Workow Check My Work Previous Next > Theve fixed costs are used to wipport all three product lines and will not change with the clination of any one product, traddition, you have determined that the elector inventory may be noted The management of the company has deemed the profit performance of the running shoe lineas unacceptable. As a result has decided to let the running shoe line Manajement does not expect to be able to increase sales in the other two lines. However, on a result of almating the running shoe in management expects the profesor company to increase by $4,600 2. Are management's decision and condusions correct? Management's decheon and conclusion are shots be avoided if the leiseliminated The profit be improved because the fixed costs vied in manufacturing and veting unting b. Prepare a variable costing income statement for the three products: Enter u niet loss as a negative number using a minusta Winslow Inc. Variable Costing Income Statements-Three Product Lines For the Year Ended December 31, 2011 Cross Training Shoes Golf Shoes Running Shoes Fixed costs DO DO DO look Pri tem b. Prepare a variable casting come statement for the three products, Enter a tet low as a negative number using a minus von Winslow Inc Variable Costing Income Statements - Three Product Lines For the Year Ended December 31, 2011 Cross Training Shoes Golf Shoes Running Shoes Fixed costs DODO . Totalfoued costs Operating income ous Use the report in () to determine the profit impact of nating the running shoeline, assuming no other changes If the running shoes line wereliminated, then the contribution margin of the product line would and the fixed costs becne Thus, the profit of the company would actually by Management should keep the line and attempt to improve the profitability of the produa by nice, volume, or costs Previous Next Cuck My Work 2 more Check My Wok uses remang Al work saved Save and all Submit Anment for Gradie