2l Your answer is partially correct. Try again. Cawley Company makes three model

Question

2l Your answer is partially correct. Try again. Cawley Company makes three models of tasers. Information on the three products is given below Tingler Shocker Stunner $304,400 $499,000 $198,300 149,800 193,300 139,400 Contribution margin 154,600 305,700 58,900 119,389 227,354 92,557 $35,211 $78,346 $(33,657) Sales Variable expenses Fixed expenses Net income Fixed expenses consist of $295,800 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,500 (Tingler), $80,000 (Shocker), and $34,000 (Stunner). The common costs will be incurred regardless of how many models are produced. The other fixed cxpenses would be eliminated if a model is phased out ames Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. Compute current net income for Cawley Company Net income Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $295,800 common costs to the two remaining product lines based on their relative sales.) (Round answers to the nearest whole dollar,e.g. 5,275.) Tingler Net Incom 200695 Shocker Net Income Total Net Income LINK TO TEXT

Explanation / Answer

Product line and total income is as shown below:

Tingler Shocker Stunner Total Sales 304,400 499,000 0 803,400 Variable expenses 149,800 193,300 0 343,100 Contribution Margin 154,600 305,700 0 460,300 Common fixed Expenses 112,076 183,724 0 295,800 Additional fixed expenses 29,500 80,000 0 109,500 Net Income 13,024 41,976 0 55,000

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