Oriole Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $304,000 $496,000 $200,000 Variable expenses 145,600 196,000 141,300 Contribution margin 158,400 300,000 58,700 Fixed expenses 118,768 224,032 92,800 Net income $39,632 $75,968 $(34,100) Fixed expenses consist of $292,000 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), $79,200 (Shocker), and $34,400 (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 Oriole Company. Net income $ (b) Compute net income by product line and in total for Oriole Company if the company discontinues the Stunner product line. (Hint: Allocate the $292,000 common costs to the two remaining product lines based on their relative sales.) Tingler Net Income Shocker Net Income $ Total Net Income $ (c) Should Oriole eliminate the Stunner product line? Why or why not? Net income would eTextbook and Media Save for Later from $ to $ Attempts: unlimited Submit Answer