Nimoy Company makes three models of phasers. Information on the three products is given below.

Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $30,000 (Stunner), $75,000 (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 phased out.Mr. Spock, an executive with the company, feels the Mega-Power line should be discontinued to increase the company??s net income.Instructions(a) Compute current net income for Nimoy Company.(b) Compute net income by product line and in total for Nimoy Company if the company discontinues the Mega-Power product line. (c) Should Nimoy eliminate the Mega-Power product line? Why or why not?

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Double-Set $500,000 200,000 300,000 225,000 Mega-Power $200,000 140,000 60,000 Stunner Sales Variable expenses Contribution margin Fixed expenses Net income $300,000 150,000 120,000 $ 30,000 90,000 $(30,000) $ 75,000