Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

-/5 Question 4 of 5 View Policies Current Attempt in Progress Cawley Company malces three models of tasers, Information on the three products is given

image text in transcribed
image text in transcribed
-/5 Question 4 of 5 View Policies Current Attempt in Progress Cawley Company malces three models of tasers, Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income Tingler $296,000 151.100 144,900 116,616 $28,284 Shocker $504,000 203,300 300,700 228,184 $72516 Stunner $200,000 138,600 61,400 93,900 $32,500) Fixed expenses consist of $296,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each mode of $29.000 (Tinger) $79.000 (Shocloer), and $34,700 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct find expenses would be eliminated if that model is phased out James Watt, an executive with the company,teels the stunner line should be discontinued to increase the company's net income (a) Compute current net income for Cawley Company Net Income 5 Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint. Allocate the $296,000 common costs to the two remaining product lines based on their relative sales.) Ting er Net Income $ Shocker Net Income S Total Net Income $ (c) Should Cowley eliminate the Stunner product line? Why or why not? Net Income would from tos eTextbook and Media

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Payroll Accounting 2019

Authors: Bernard J. Bieg, Judith A. Toland

29th Edition

1337619779

More Books

Students also viewed these Accounting questions

Question

Where in the hiring process are you?

Answered: 1 week ago