Crane Company makes three models of tasers. Information on the three products is given below.

Fixed expenses consist of $$308,000$ of common costs allocated to the three products based on relative sales, as well as direct fixed

expenses unique to each model of $$30,000($Tingler$),$ $$79,000($Shocker$),$ and $$34,800($Stunner$).$ The common costs will be incurred

regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.

James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.

$($a$)$

Compute current net income for Crane Company.

Net income

$

$($b$)$

Compute net income by product line and in total for Crane Company if the company discontinues the Stunner product line. $($Hint:

Allocate the $$308,000$ common costs to the two remaining product lines based on their relative sales.$)$

Tingler Net Income $

Shocker Net Income $

Total Net Income $

$($c$)$

Should Crane eliminate the Stunner product line?

Why or why not?

Net income would

from $

to $

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