Hi Please give me step by step instructions to see how I get the correct answer. The decision to Discontinue a Product On the basis of the following data, the general manager of Featherweight Shoes Inc. decided to discontinue Children's Shoes because it reduced income from operations by $17,000. Featherweight Shoes Inc.Product-Line Income StatementFor the Year Ended April 30, 2016 Children's Shoes Men's Shoes Women's Shoes Total Sales $235,000 $300,000 $500,000 $1,035,000 Costs of goods sold: Variable costs $130,000 $150,000 $220,000 $500,000 Fixed costs 41,000 60,000 120,000 221,000 Total cost of goods sold $171,000 $210,000 $340,000 $721,000 Gross profit $64,000 $90,000 $160,000 $314,000 Selling and adminstrative expenses: Variable selling and admin. expenses $46,000 $45,000 $95,000 $186,000 Fixed selling and admin. expenses 35,000 20,000 25,000 80,000 Total selling and admin. expenses $81,000 $65,000 $120,000 $266,000 Income (loss) from operations $(17,000) $25,000 $40,000 $48,000 If the children Shoe's are discontinued, the company's ____ Income or loss? would _ increase or decrease by $. (dollar amount _________________

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 6E

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Please give me step by step instructions to see how I get the correct answer.

The decision to Discontinue a Product

On the basis of the following data, the general manager of Featherweight Shoes Inc. decided to discontinue Children's Shoes because it reduced income from operations by $17,000.

Featherweight Shoes Inc. Product-Line Income Statement For the Year Ended April 30, 2016
	Children's Shoes	Men's Shoes	Women's Shoes	Total
Sales		$235,000			$300,000	$500,000	$1,035,000
Costs of goods sold:
Variable costs	$130,000	$150,000	$220,000	$500,000
Fixed costs	41,000	60,000	120,000	221,000
Total cost of goods sold	$171,000	$210,000	$340,000	$721,000
Gross profit	$64,000	$90,000	$160,000	$314,000
Selling and adminstrative expenses:
Variable selling and admin. expenses	$46,000	$45,000	$95,000	$186,000
Fixed selling and admin. expenses	35,000	20,000	25,000	80,000
Total selling and admin. expenses	$81,000	$65,000	$120,000	$266,000
Income (loss) from operations	$(17,000)	$25,000	$40,000	$48,000

If the children Shoe's are discontinued, the company's ________________ Income or loss?

would _______________________ increase or decrease by $. (dollar amount ___________________________

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