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Cost of goods sold Selling and administrative expenses $64,400 48,300 $32,500 30,000 $29,000 29,000 These fixed costs are useb. Prepare a variable costing income statement for the three products. Enter a net loss as a negative number using a minus sic. Use the report in (b) to determine the profit impact of eliminating the running shoe line, assuming no other changes. If t

I do not know what to do for letter C, please do provide work thank you!

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Answer #1
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If 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 $ 12200. Management should keep the line and attempt to improve the profitability of the product by increasing prices, increasing volume, or reducing costs.
The profit of the company would actually decline by $12200
The Contribution margin generated by Running shoes will be eliminated if Running Shoes is eliminated.
So the Profit margin of the company would decrease by the Contribution margin generated by Running Shoes Division which is $12200.
Fixed costs cannot be eliminated so are irrelevant in decision making.
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