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Homework answers / question archive / Marinette Company makes several products, including canoes
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. $2,600,000 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $ 570,000 Direct labor 620,000 Variable overhead 420,000 Variable selling and administrative 260,000 Total variable costs Contribution margin Fixed costs Direct 495,000 Indirect 420,000 Total fixed costs Net income 1.870.000 730,000 915.000 $ (185,000) 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.) Keep the department Eliminate the department Sales Expenses Search O
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.) Keep the department Eliminate the department Sales Expenses Total expenses Net Income (loss) 0 S Logo Required 2 > earch o 6
$2,600,000 MARINETTE COMPANY Income Statement-Canoe Segment Sales Variable costs Direct materials $570,000 Direct labor 620,000 Variable overhead 420,000 Variable selling and administrative 260,000 Total variable costs Contribution margin Fixed costs Direct 495,000 Indirect 420,000 Total fixed costs Net income 1,870,000 730,000 915,000 $ (185,000) 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 Should management discontinue the manufacturing of cances? Should management discontinue the manufacturing of canoes?
Req 1
| Keep the Department | Eliminate the Department | |||
| Sales | $ 2,600,000 | $0 | ||
| Expense: | $0 | |||
| Direct materials | 570,000 | $0 | ||
| Direct labor | 620,000 | $0 | ||
| Variable overhead | 420,000 | $0 | ||
| Variable selling and administrative | 260,000 | $0 | ||
| Direct Fixed costs | 495,000 | $0 | ||
| Indirec Fixed Cost | $420,000 | $420,000 | ||
| Total Expense | $ 2,785,000 | $420,000 | ||
| Net income ( Loss) | ($185,000) | ($420,000) | ||
| The canoe division should be | Kept | |||
| If Canoe division is eliminated , income will be | Lower by | $ 235,000 | ||
Req 2
2.
Canoes should not be discontinued.
