Segment variable costing income statement and effect on income of change in operations Extreme Camping Company manufactures three sizes of extreme weather
tents”small (S), medium (M), and large (L). The income statement has consistently indicated a net loss for the M size, and management is considering three
proposals: (1) continue Size M, (2) discontinue Size M and reduce total output accordingly, or (3) discontinue Size M and conduct an advertising campaign to
expand the sales of Size S so that the entire plant capacity can continue to be used. If Proposal 2 is selected and Size M is discontinued and production
curtailed, the annual fixed production costs and fixed operating expenses could be reduced by $57,600 and $40,300, respectively. If Proposal 3 is selected, it
is anticipated that an additional annual expenditure of $43,200 for the rental of additional warehouse space would yield an increase of 130% in Size S sales
volume. It is also assumed that the increased production of Size S would utilize the plant facilities released by the discontinuance of Size M. The sales and
costs have been relatively stable over the past few years, and they are expected to remain so for the foreseeable future. The income statement for the past
year ended June 30, 2012, is as follows: Hide Hint(s) 1. Prepare an income statement for the past year in the variable costing format. Enter all amounts as
positive numbers. Extreme Camping Company Contribution Margin by Size Segment For the Year Ended June 30, 2012 Size S Size M Size L Total Sales $ $ $ $
Variable cost of goods sold Manufacturing margin $ $ $ $ Variable operating expenses Contribution margin $ $ $ $ Fixed costs: Manufacturing costs $ Operating
expenses Total fixed costs $ Income from operations $