Marinette Company makes several products, including canoes. The company has been experiencing losses from its...
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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 available regarding its canoe segment. (Leave no cells blank. Enter zeros where appropriate.) $2,300,000 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $ 510,000 Direct labor 560,000 Variable overhead 360,000 Variable selling and administrative 230,000 Total variable costs Contribution margin Fixed costs Direct 435,000 Indirect 360,000 Total fixed costs Net income 1,660,000 640,000 795,000 $ (155,000) 1. If canoes are discontinued, calculate the net income lost or gained. Keep the department Eliminate the department Sales Expenses: Total expenses Net income (loss) 2. Should management discontinue the manufacturing of canoes? O No Yes
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