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Fixed costs consist of 5288,500 of common costs allocated to the three products based on relative sales, and additional fixed costs of $29,100 (Stunner), 576,600
Fixed costs consist of 5288,500 of common costs allocated to the three products based on relative sales, and additional fixed costs of $29,100 (Stunner), 576,600 (Double Set), and 530,000 (Mega-Power). The common costi will be incurredregardless of how many models are produced. The other fixed costs would be eliminated if a model is discontinued. Peul White, an evecutive with the company, feels the Mege-Power line should be discontinued to increase the company's net income
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