Question

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.) $2,100,000 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $ 470,000 Direct labor 520,000 Variable overhead 320,000 Variable selling and administrative 210,000 Total variable costs Contribution margin Fixed costs Direct 395,000 Indirect 320,000 Total fixed costs Net income 1,520,000 580,000 715,000 $ (135,000)

Answer 1

Eliminate the department $0 It canoes are discontinued, particulars kept the department sales. $2,100,000 Expenses : pirect material 470,000 pirect Labor 520,000 variable overhead 320,000 variable selling Eadmin. 210,000 Direct fixed cost 395,000 Indirect fired cost 320,000 $320,000 oral expenses. $2,235,000 390,000 Net Income Closs) $6135,000) $350,000) The cance division should be kept If the cance division is eliminated, inome will be lower by $185,000 9 No, the management should not discontine the manufacturing of canoes.

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