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Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segm- and is considering dropping that product line. The following information is available regarding its canoe segment. Sales Variable costs Direct materials Direct labor MARINETTE COMPANY Income Statement-Canoe Segment Variable overhead Variable selling and administrative Total variable costs Contribution margin Fixed costs Direct Indirect Total fixed costs Net income $ 470,000 520,000 320,000 210,000 395,000 320,000 $2,100,000 1,520,000 580,000 715,000 $ (135,000) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes?

Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segm- and is considering dropping that product line. The following information is available regarding its canoe segment. Sales Variable costs Direct materials Direct labor MARINETTE COMPANY Income Statement-Canoe Segment Variable overhead Variable selling and administrative Total variable costs Contribution margin Fixed costs Direct Indirect Total fixed costs Net income $ 470,000 520,000 320,000 210,000 395,000 320,000 $2,100,000 1,520,000 580,000 715,000 $ (135,000) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Sales Variable costs Direct materials Direct labor MARINETTE COMPANY Income Statement-Canoe Segment Variable overhead Variable selling and administrative Total variable costs Contribution margin Fixed costs Direct Indirect Total fixed costs Net income $ 470,000 520,000 320,000 210,000 395,000 320,000 $2,100,000 1,520,000 580,000 715,000 $ (135,000) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? Complete this question by entering your answers in the tabs below.
Transcribed Image Text: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. Sales Variable costs Direct materials Direct labor MARINETTE COMPANY Income Statement-Canoe Segment Variable overhead Variable selling and administrative Total variable costs Contribution margin Fixed costs Direct Indirect Total fixed costs Net income $ 470,000 520,000 320,000 210,000 395,000 320,000 $2,100,000 1,520,000 580,000 715,000 $ (135,000) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? Complete this question by entering your answers in the tabs below.
Required 1 Required 2 If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) Sales Expenses: Total expenses Net income (loss) Required 1 Required 2 Keep the Eliminate the department department 0 $ Should management discontinue the manufacturing of canoes? Should management discontinue the manufacturing of canoes?
Transcribed Image Text:Required 1 Required 2 If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) Sales Expenses: Total expenses Net income (loss) Required 1 Required 2 Keep the Eliminate the department department 0 $ Should management discontinue the manufacturing of canoes? Should management discontinue the manufacturing of canoes?
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