3. Eliminate an Unprofitable Segment Cloud busters Aircraft Inc. makes a variety of small airplanes for business and personal use" The Spitfire, the Lightning Bolt, and the Aerobatic. Lately business has been very slow and the Aerobatic has become unprofitable. Consider the income statement data as follows: Spitfire Sales $9,000,000 Lightning Bolt $8,000,000 Aerobat $3,500,000 Total $20,500,000 Variable Expenses 6,200,000 4,200,000 2,600,000 $13,000,000 Contribution. 2,800,000 3,800,000 900,000 $7,500,000 Margin Fixed Expenses 1,100,000 Net Income $1,700,000 1,250,000 $2,550,000 1,150,000 $3,500,000 ($250,000) $4,000,000 Additional Fixed Exp. Adjusted Net Income If the Aerobat is eliminated, the fixed expenses will be allocated to the Spitfire and Lightning Bolt at 45% and 55% respectively. Should the company continue to make the Aerobat, or would it be better off discontinuing this line of business? Please explain and show your calculations. You must show new allocation of fixed cost to get full credit-just like in the problem we went over in class.