2 of 2 View Policies Current Attempt in Progress Clarington Company makes three models of phasers. Information on the three products is given below: Stunner Double-Set Mega-Power Sales $297,000 $445,500 $185,625 Variable expenses 153,500 203,500 144,500 Contribution margin 143,500 242,000 41,125 Fixed expenses 122,500 201,400 84,500 Net income $21,000 $40,600 ($43,375 ) - / 10 III Fixed expenses consist of $273,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,600 (Stunner), $75,900 (Double-Set), and $29,900 (Mega-Power). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is discontinued. John Liu, an executive with the company, feels the Mega-Power line should be discontinued to increase the company's net income. Calculate current net income for Clarington Company. Current net income $ eTextbook and Media Question Part Score Calculate net income by product line and in total for Clarington Company if the company discontinues the Mega-Power product line. (Hint: Allocate the $273,000 common costs to the two remaining product lines based on their relative sales.) Stunner Net income eTextbook and Media Question Part Score $ Double-Set Should Clarington eliminate the Mega-Power product line? Why or why not? Total Clarington should eliminate the Mega-Power product line. Elimination of the line would cause net income to drop eTextbook and Media Question Part Score --/2 --16 --/2