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Clarington Company makes three models of phasers. Information on the three products is given below: Stunner Double-Set Mega-Power Sales $299,000 $448,500 $186,875 Variable expenses 146,500 195,500 143,500 Contribution margin 152,500 253,000 43,375 Fixed expenses 115,500 219,700 87,700 Net income $37,000 $33,300 ($44,325) Fixed expenses consist of $288,500 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29.100 (Stunner), $75,300 (Double-Set), and $30,000 (Mega-Power). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is discontinued. John Liu, an executive with the company, feels the Mega-Power line should be discontinued to increase the company's net income. X Your answer is incorrect. Fixed expenses consist of $288,500 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,100 (Stunner), $75,300 (Double-Set), and $30,000 (Mega-Power). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is discontinued. John Liu, an executive with the company, feels the Mega-Power line should be discontinued to increase the company's net income. X Your answer is incorrect. Calculate current net income for Clarington Company. Current net income $ 27675 e Textbook and Media 0/2 Question Part Score Calculate net income by product line and in total for Clarington Company if the company discontinues the Mega-Power product line. (Hint: Allocate the $288,500 common costs to the two remaining product lines based on their relative sales.) Stunner Double-Set Total $ Net income 31500 $ 35900 (39725 e Textbook and Media 0/6 Question Part Score

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