Question

13)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  Sales $1,940,000     Variable costs          Direct materials$510,000           Direct labor430,000           Variable overhead400,000           Variable selling and administrative290,000       Total variable costs 1,630,000       Contribution margin 310,000     Fixed costs          Direct355,000           Indirect370,000       Total fixed costs 725,000       Net income $(415,000)       1.If canoes are discontinued, calculate the net income lost or gained.

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