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Clarington Company makes three models of phasers. Information on the three products is given below: Stunner Sales Variable expenses Contribution margin Fixed expenses $295,000 148,000
Clarington Company makes three models of phasers. Information on the three products is given below: Stunner Sales Variable expenses Contribution margin Fixed expenses $295,000 148,000 147,000 120,500 $26,500 Double-Set $442,500 190,000 252,500 214,900 $37,600 Mega-Power $184,375 139,000 45,375 86,600 ($41,225) Net income Fixed expenses consist of $287,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $30,000 (Stunner), $75,800 (Double-Set), and $29,200 (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 $ e Textbook and Media
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