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

		Tingler		Shocker		Stunner
Sales		$ 302,000		$ 498,000		$ 200,000
Variable expenses		150,900		193,100		137,700
Contribution margin		151,100		304,900		62,300
Fixed expenses		121,412		232,988		96,200
Net income		$ 29,688		$ 71,912		$( 33,900)

Fixed expenses consist of $ 306,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $ 29,000 (Tingler), $ 80,600 (Shocker), and $ 35,000 (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 companys net income. (a) Compute current net income for Pharoah Company.

Net income

$ enter the net income in dollars

(b) Compute net income by product line and in total for Pharoah Company if the company discontinues the Stunner product line. (Hint: Allocate the $ 306,000 common costs to the two remaining product lines based on their relative sales.)

Tingler Net Income		$ enter a dollar amount
Shocker Net Income		$ enter a dollar amount
Total Net Income		$ enter a dollar amount

(c) Should Pharoah eliminate the Stunner product line? select an option NoYes Why or why not?

Net income would select an option increasedecrease from $ enter a dollar amount to $ enter a dollar amount .