b

Oriole Company makes three models of phasers. Information on the three products is given below: Fixed costs consist of $288,500 of common costs allocated to the three products based on relative sales, and additional fixed costs of $29,100 (Stunner), $76,600 (Double-Set), and $30,000 (Mega-Power). The common costs will be incurred regardless of how many models are produced. The other fuxed costs would be eliminated if a model is discontinued. Mark Harris, an evecutive with the company, feels the Mega-Power line should be discontinued to increase the company's net income. Your answer is incorrect. Calculate net income by product line and in total for Oriole Company if the company discontinues the Mega-Power product line. (Hint: Allocate the $288.500 common costs to the two remaining product lines based on their relative sales.)