Problem 3 (Textbook Reference: P6-4) - Decide whether to accept or reject a special order Following are sales and other operating data for the three products made and sold by Ranger Company: Product Total Sales Manufacturing costs $ 600,000 S300,000 S200,000 1,100,000 Fixed Variable 60,000 S S 280,000 20,000 S S 220,000 100,000 60,000 S 140,000 600,000 Selling and administrative costs: Fixed Variable 20,000 $ 40,000 $ 20,000 S 20,000 S 12,000 S 30,000 $ 52,000 90,000 S882,000 (2,000) S 218,000 280,000 S202,000 Total costs Net income (loss) S 200,000 $ 20,000 S In view of the net loss for Product C, Ranger's management is considering dropping that product. All variable costs are direct costs and would be eliminated if Product C were dropped. Fixed costs are indirect costs; no fixed costs would be eliminated. Assume that the space used to produce Product C would be left idle Re quired a. Would you recommend the elimination of Product C? Give supporting computations. Hint: Utilize the table below to help you reach a conclusion! Remember to answer ifyou would keep or drop Product C Ranger Company Relevant Revenues and Costs of Alternatives Keep Product C Eliminate Product C Diffe re ntial Revenues (all variable) Net advantage (disadvantage) of dropping product C