Inc. decided to discontinue Children's Shoes because it reduced income from operations by $17,000. What is the flaw in this decision, if it is assumed fixed costs would not be materially affected by the discontinuance?

Featherweight Shoes Inc.

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

Product-Line Income Statement For the Year Ended April 30, 2016