Case 2 Luigi Co produces three models of home security systems. Information on the three given below: products is Assurance Decoder Goomba Detector $450,000 $750,000 $300,000 Sales Variable expenses Contribution margin Fixed expenses Net income 17 225,000 300,000 225,000 180,000 345,000 82,500 142.500 450,000 $ 45.000 $105.000 $(60.000) Fixed expenses consist of $450,000 of common costs allocated to the three products based on relative whic segm ped) and additional fixed not 120,000 (Decoderand $52,500 (Goomba Detector) The regardless of how many models are produced. The other fixed common expenses would be eliminated if a model is phased out. After reviewing the above information, the CEO feels that the Goomba Detector line should be discontinued to increase the company's net income. Compute current net income for Luigi Co Compute net income by product line and in total for Luigi Co, if the company discontinues the Goomba Detector product line. Split any costs that remain 50/50 between the remaining lines. Should Luigi Co, eliminate the Goomba Detector product line? Why or why not? Assume instead that fixed expenses consist of $150,000 of common costs allocated to the three products equally, and additional fixed costs of $130,000 (Assurance), $295,000 (Decoder), and $92,500 (Goomba Detector). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. Compute net income by product line and in total for Luigi Co, if the company discontinues Goomba Detector product line. Should Luigi Co, eliminate the Goomba Detector product line? Why or why not? (a) (b) (c) (d)