Allocating facility-level cost and a product elimination decision Holby Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow.

Holby allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $108,000 per quarter, to the two products equally.
Required

a. Compute the net profit for each product.

b. Assuming that the overhead allocation for Basco boards includes $24,000 of facility-level cost, would you advise Holby to eliminate these boards? (Hint: Consider the method used to allocate the delivery and selling expense.)