Question 10 of 20 < > Dew Policies urrent Attempt in Progress Oriole Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $296,000 $504,000 $200,000 Variable expenses 154,100 197.700 137,700 Contribution margin 141.900 306,300 62,300 Fixed expenses 116,616 228,584 93,500 Net income $25,284 $77,716 $31,200) /7.5 Fixed expenses consist of $296,000 of common costs allocated to the three products based on relative sales, as well as direct fixed i expenses unique to each model of $29,000 (Tingler), $79,400 (Shocker), and $34,300 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct foxed 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. (e) 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 $296,000 common costs to the two remaining product lines based on their relative sales) Tingler Net Income $ Shocker Net Income 5 Total Net Income $ (c) Should Oriole eliminate the Stunner product line? Why or why not? Net income would from $ to $ eTextbook and Media Attempts: 0 of 2 used Submit Answer