Marinette Company makes several products, including canoes. The company has been

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. MARINETTE COMPANY Income Statement-Canoe Segment $3,800, 000 Sales Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative S 810, 000 860, 000 660,000 380,000 Total variable costs Contribution margin Fixed costs 2,710,000 1,090,000 Direct Indirect 735,000 660,000 1,395, 000 $ (305,000) Total fixed costs Net income

Explanation / Answer

as the loss increases from - $305,000 to - $660,000.

we can say that net income lost is ($305,000 - 660,000) => -$355,000.

by discontinuing the deparment the net income lost will be $355,000.

keep the department eliminate the department sales $3,800,000 nil Expenses: variable costs: Direct materials $810,000 nil Direct labour 860,000 nil variable overhead 660,000 nil variable selling and administrative 380,000 nil total direct fixed cost 735,000 nil total indirect fixed cost 660,000 660,000 total expenses 4,105,000 660,000 net income (loss) ($305,000) ($660,000)

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.