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Clarington Company makes three models of phasers. Information on the three products is given below Viewing A Stunner $298.000 Mega-Power $186,250 Sales Variable expenses 146.500

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Clarington Company makes three models of phasers. Information on the three products is given below Viewing A Stunner $298.000 Mega-Power $186,250 Sales Variable expenses 146.500 136.500 Double-Set $447.000 200,000 247.000 203.500 $43,500 151.500 49.750 Contribution margin Fixed expenses Net income 85.300 125,000 $26,500 ($35.550) Fixed expenses consist of $280,000 of common costs allocated to the three products based on relative sales, and additional fed expenses of $30,000 (Stunner), $74,500 (Double-Set)and $29.300 (Mega-Power). The common costs will be incurred regardless of how many models are produced. The other foed expenses would be eliminated it 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 e Textbook and Media Question Part Score --/6 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 e Textbook and Media

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