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  1. business
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  3. athleisure inc manufactures and sells legwear and

Athleisure Inc manufactures and sells legwear and athletic footwear. The company's product line income statement...

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Accounting

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Athleisure Inc manufactures and sells legwear and athletic footwear. The company's product line income statement follows: Legwear Footwear Total Sales revenue 525,000 168,000 $693,000 Cost of goods sold Variable 112,500 73,500 $186,000 Fixed 123,000 42,000 $165,000 Total cost of goods sold $ 235,500 $115,500 $ 351,000 Gross profit $289,500 $52,500 $342,000 Marketing and administrative expenses Variable 37,500 42,000 $79,500 Fixed 48,000 28,500 $76,500 Total marketing and administrative expenses $85,500 $70,500 $156,000 Operating income (loss) $ 204,000 ($18,000) $186,000 Management is considering dropping the athletic footwear product line. Accountants for the company estimate that dropping the sneakers line will decrease fixed cost of goods sold by $16,000 and fixed marketing and administrative expenses by $4,000. Required: Prepare an analysis supporting your opinion about whether or not the sneakers product line should be dropped

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