Safe and Secure, Inc. produces three models of home security systems. Information on the three products is given below: Decoder Sales Variable expenses Contribution margin Fixed expenses Net income Assurance $456,300 228,150 228,150 183,100 $45,050 $760,500 304,200 456,300 341,800 $114,500 Burglar Beware $302,200 211,540 90,660 145,200 $(54,540 ) Fixed expenses consist of $454,000 of common costs allocated to the three products based on relative sales, and additional fixed costs of $44,400 (Assurance), $119,100 (Decoder), and $52,600 (Burglar Beware). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. Matt Dillon, an executive with the company with extensive law enforcement background, feels that the Burglar Beware line should be discontinued to increase the company's net income. (a) Your answer is partially correct. Assume instead that fixed expenses consist of $141,640 of common costs allocated to the three products equally, and additional fixed costs of $132,300 (Assurance), $295,500 (Decoder), and $100,660 (Burglar Beware). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. Compute net income by product line and in total for Safe and Secure, Inc., if the company discontinues Burglar Beware product line. Should Safe and Secure, Inc., eliminate the Burglar Beware product line? Why or why not? (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Assurance Decoder Company Total Net income $ $ 115,010 Yes y, the total net income for the company is higher when the Burglar Beware product line is excluded. e Textbook and Media Save for Later Attempts: 1 of 5 used Submit