Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $322,500 of its fixed costs are avoidable.

 Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $322,500 of its fixed costs are avoidable.

 (a) Compute the income increase or decrease from eliminating this segment.

(b) Should the segment be continued or eliminated?

Explanation
(a)
Segment elimination results in a $17,300 increase in income.

(b)
Eliminate. The segment should be eliminated because overall income increases by $17,300 from segment elimination.

Thanks