Winslow Inc.

Product Income Statements$-$Absorption Costing

For the Year Ended December $31,20$Y$1$

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

$$84,400,$$$41,100,$$$36,800$

Selling and administrative expenses

$63,300$

$38,000$

$36,800$

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 $$58,000.$