Jacob Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow. 

Jacob allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $54,000 per quarter, to the two products equally. 

Required

a. Compute the net profit for each product.

b. Assuming that the overhead allocation for Basco boards includes $12,000 of facility-level costs, would you advise Jacob to eliminate these boards? 

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Basco Boards Shimano Boards Production costs Direct materials Direct labor Allocated overhead Total units produced and sold Total sales revenue $27 $39 $15 4,000 $36 $51 $18 8,000 $336,000 $888,000