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PR 20-5A Segment variable costing income statement and effect on income of Obj change in operations aldespin Company manufactures three sizes of camping tents-small (S), medium (MD, and large 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 margin, Size S, (L). 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 EXCEL TEMPLATE fixed production costs and fixed operating expenses could be reduced by $46,080 and $32,240, respectively. If Proposal 3 is selected, it is anticipated that an additional annual expenditure of $34,560 for the rental of additional warehouse space would yield an additional 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 (Continued)