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Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following Information is avallable regarding its canoe segment MARINETTE COMPANY Incone Statement-Canoe Segment Sales $4,000,eee Variable costs Direct materials $85e,eee Direct labor 900, eee Variable overhead 700,000 Variable selling and administrative 400 eee Total variable costs 2,850,000 Contribution margin 1,150,000 Fixed costs Direct 775,000 Indirect 700.000 Total fixed costs 1,475.000 Net Income $ (125,000) 1. If canoes are discontinued, calculate the net Income lost or gained. 2. Should management discontinue the manufacturing of canoes? Complete this question by entering your answers in the tabs below. Required 1 Required 2 If cances are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) Keep the department Eliminate the department $ 4,000,000 Sales Expenses Direct materials Direct labor Variable overhead Variable selling and administrative costs 850,000 900.000 700.000 400,000 Direct foxed costs indirect fixed costs Total expenses Net income (loss) 775,000 700,000 3,625,000 700,000 $ 3,625,000) $3.300,000 The canoe division should be: If the canoe division is eliminated, income will be Kept lower by Rec2

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