Marinette Company makes several products, including canoes. The company has been experiencing losses from its...
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Accounting
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 available regarding its canoe segment.
MARINETTE COMPANY Income StatementCanoe Segment
Sales
$
3,900,000
Variable costs
Direct materials
$
830,000
Direct labor
880,000
Variable overhead
680,000
Variable selling and administrative
390,000
Total variable costs
2,780,000
Contribution margin
1,120,000
Fixed costs
Direct
755,000
Indirect
680,000
Total fixed costs
1,435,000
Net income
$
(315,000
)
1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes?
Required 1 Required 2 Hint If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter Print Keep the department Eliminate the department Sales Expenses Total expenses Net income (loss) Required 2 >
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