Winslow Int. manufactures and tells three types of shoes. The income statements prepared under the absorption coating 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 $538,500 $328,500 $272,700 Cost of goods sold (280,000) (161,000) (182.700) Grote profit 5255,500 $167.500 $90,000 Selling and administrative expenses (222,300) (120,600) (150,300) Operating income 136,200 $46,900 $(60,500) In addition, you have determined the following information with respect to allocated nxed cost Cross Training Shoes Golf Shoes Running Shoes Fixed costs Cost of goods sold $86,200 $42.700 $3,200 Selling and administrative expenses 64.600 39,400 38,200 These fond 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 lineas unacceptable. As a result, it has decided to eliminate the running shoe in Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the running shoeline management expects the profits of the company to increase by $60,300 a. Are management's decision and conclusions correct? The profit will not Management's decision and conclusion are incorrect shoes will not be avoided if the line is eliminated be improved because the fixed costs used in manufacturing and selling running b. Prepare a variable conting 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, 2011 Cross Training Shoes Golf Shoes Running Shoes Revenues Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin ed costs Fixed manufacturing costs Fixed setting and administrative expenses Totaled costs Operating income (los)