Problem 3 (Textbook Reference: P6-4) - Decide whether to accept or reject a special order Following are sales and other operating data for the three products made and sold by Ranger Company Product $ A 600,000 $ 300,000 $ 200,000 $ Total 1,100,000 60,000 280,000 $ $ 20,000 220,000 $ $ 60,000 100,000 $ $ 140,000 600,000 Sales Manufacturing costs: Fixed Variable Selling and administrative costs: Fbed Variable Total costs Net income (loss) $ $ $ $ 20,000 40,000 400.000 200,000 20,000 20,000 280,000 20,000 12.000 30,000 202,000 (2,000) $ $ $ 52,000 90,000 882,000 218,000 $ S In view of the net loss for Product C, Ranger's management is considering dropping that product. All variable costs are direct costs and would be eliminated if Product C were dropped. Fixed costs are indirect costs, no fixed costs would be eliminated. Assume that the space used to produce Product C would be left idle. Required: a. Would you recommend the elimination of Product C? Give supporting computations. Hint: Unilize the table below to help you reach a conclusion! Remember to answer if you would keep or drop Product C Ranger Company Relevant Revenues and Costs of Alteratives Eliminate Product C Differential Revenues Expenses (al variable) Net advantage (disadvantage) of dropping product C By how much would the company's overall net income increase or decrease if Product C was eliminated