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Clarington Company makes three models of phasers. Information on the three products is given below Stunner Double-Set Mega-Power Sales $ 296,000 $444,000 $ 185,000 Variable
Clarington Company makes three models of phasers. Information on the three products is given below Stunner Double-Set Mega-Power Sales $ 296,000 $444,000 $ 185,000 Variable expenses 146,000 194,000 142,500 Contribution margin 150,000 250,000 42,500 Fixed expenses 122,000 207,100 85,500 Net income $ 28,000 $ 42,900 ($ 43,000) Fixed expenses consist of $ 280,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $ 29,600 (Stunner) $ 75,500 (Double-Set), and $ 29,500 (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 Llu, 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 Calculate net income by product line and in total for Clarington Company if the company discontinues the Mega-Power product line. (Hint: Allocate the $ 280,000 common costs to the two remaining product lines based on their relative sales.) Stunner Double-Set Total Net income 8400 $ 6500 14900 eTextbook and Media Question Part Score -- Should Clarington eliminate the Mega-Power product line? Why or why not? Clarington eliminate the Mega-Power product line. Elimination of the line would cause net income to
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