3. Carl on Duty Footwear manufactures and sells three products. The income statements prepared under the absorption costing method for the three products are as follows: Carl on Duty Footwear Product Income Statements - Absorption Costing For the Year Ended January 31 Financial Categories Non-Slip Shoes 5,700,000 Steel Toe Boots Work Boots $ 4,200,000.00 $ 2,814,000.00 24 Revenues 6,900,000 Cost of goods sold Gross profit 3,016,000 3,392,000 2,684,000 3,508,000 1,386,000 Selling and admin expenses 2,466,000 2,484,000 2,041,000 Income from operations 218,000 1,024,000 (655,000) Fixed Costs Cost of goods sold Selling and admin expenses 928,000 2$ 897,000 798,000 696,000 828,000 588,000 These fixed costs are used to support all three product lines and will not change with the elimination of any one product. In addition, you have determined that the effects of inventory may be ignored. The management of the company has deemed the profit performance of the running shoe line as unacceptable. As a result, it has decided to eliminate the running shoe line. Management does not expect to be able to increase sales in the other two lines. However, as a result of eliminating the work boot line, management expects the profits of the company to increase by $655,000. а. Do you agree with managementť's decision and conclusions? Explain your answer. b. Prepare a variable costing income statement for the three products. C. Use the report in (a) to determine the profit impact of eliminating the work boot line assuming no other changes.

Salespersons' Report and Analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Salesperson Total Sales Variable Cost of Goods Sold Variable Selling Expenses Case $514,000 $246,720 $92,520 Dix 380,000 148,200 68,400 Johnson 455,000 209,300 86,450 LaFave 531,000 297,360 106,200 226,800 88,200 Orcas 630,000 219,520 89,600 Sussman 448,000 355,000 198,800 006 Willbond Required:

Variable and Absorption Costing—Three Products Winslow Inc. manufactures and sells three types of shoes. The income statements prepared under the absorption costing method for the three shoes are as follows: Winslow Inc.Product Income Statements—Absorption CostingFor the Year Ended December 31, 20Y1   Cross Training Shoes Golf Shoes Running Shoes Revenues $5,800,000    $6,900,000    $4,200,000    Cost of goods sold (3,016,000)   (3,381,000)   (2,814,000)   Gross profit $2,784,000    $3,519,000    $1,386,000    Selling and administrative expenses (2,436,000)   (2,484,000)   (2,142,000)   Operating income $348,000    $1,035,000    $(756,000)   In addition, you have determined the following information with respect to allocated fixed costs:   Cross Training Shoes Golf Shoes Running Shoes Fixed costs:       Cost of goods sold $928,000   $897,000   $798,000   Selling and administrative expenses 696,000   828,000   588,000   These fixed costs are used to support…

2 Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows.  Income Statement (Absorption Costing)   Sales (80,000 units × $45 per unit) $ 3,600,000 Cost of goods sold 2,000,000 Gross profit 1,600,000 Selling and administrative expenses 560,000 Income $ 1,040,000   Additional Information Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. The company's product cost of $25 per unit consists of the following.  Direct materials $ 4 per unit Direct labor $ 10 per unit Variable overhead $ 4 per unit Fixed overhead ($700,000 / 100,000 units) $ 7 per unit Required:Prepare an income statement for the company under variable costing.