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. MARINETTE COMPANY Income Statement-Canoe Segment $2,070,000 Sales Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative 230,000 $460,000 400,000 270,000 Total variable costs 1,360,000 710,000 Contribution margin Fixed costs Direct Indirect 790,000 250,000 Total fixed costs 1,040,000 Net income $(330,000) 1. If canoes are discontinued, calculate the net income lost or gained Keep the Eliminate epartnedepartmen the Sales Expenses Total expenses Net income (loss) 2. Should management discontinue the manufacturing of canoes? No Yes
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