Pharoah 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		149,800		193,300		139,400
Contribution margin		154,200		302,700		60,600
Fixed expenses		119,984		226,816		93,200
Net income		$34,216		$75,884		$(32,600)

Fixed expenses consist of $296,000 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), $80,000 (Shocker), and $34,000 (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 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 $296,000 common costs to the two remaining product lines based on their relative sales.)

Tingler Net Income		$enter net income amount in dollar
Shocker Net Income		$enter net income amount in dollar
Total Net Income		$enter total net income amount in dollar

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

Net income would select an option decreaseincrease from $enter net income in dollars to $enter net income in dollars .