Your answer is partially correct. Try again Cawley Company makes three models of

Question

Your answer is partially correct. Try again Cawley Company makes three models of tasers. Information on the three products is given below Sales Variable Contribution margin Fixed expenses Net income Tingler Shocker Stunner $280,000 $520,000 $200,000 130,000 192,000 137,000 63,000 96,600 expenses 150,000 131,240 235,160 328,000 9,900 S18.760 92,840 5(33,600) Fixed expenses consist of $308,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $45,000 (Tingler), $75,000 (Shocker), and $35,000 (Stunner). 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. James 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 78000 Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product lne. (Hint: Allocate the $308,000 common costs to the two remaining product lines based on their relative sales.) (Round intermediate calculations to 4 decimal places, e.g. 15.2575 and final answers to the nearest whole dollar, e.g. 5,275.) Tingler Net Income Shocker Net Income Total Net Income

Explanation / Answer

b Tingler Shocker Total Contribution margin 150000 328000 478000 Fixed expenses 152800 275200 428000 Net income -2800 52800 50000

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