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Variable and Absorption Costing-Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc. Product Income Statements-Absorption Costing For the Year Ended December 31, 20Y1 Cross Training Shoes Golf Shoes Running Shoes Revenues $531,100 $334,600 $287.800 Cost of goods sold 276,200 164,000 192,800 Gross profit $254.900 $170,600 $95.000 Selling and administrative expenses 219,200 122,800 158,700 Income (loss) from operations $35,700 $47,800 $(63,700) In addition, you have determined the following information with respect to allocated fixed costs: Cross Golf Running Training Shoes Shoes Shoes Fixed costs: $40,300 Cost of goods sold Selling and administrative expenses $85,000 $43,500 63,700 40,200 40,300 c. Use the report in (b) to determine the profit impact of eliminating the running shoes line, assuming no other changes Ir the running shoes line were eliminated, then the contribution margin of the product line would be eliminated and the fixed costs would not be eliminated. Thus, the profit of the company would actually decline by Management should keep the line and attempt to improve the profitability of the product by increasing prices, increasing volume, or reducing costs

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