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5 Weygandt, Managerial Accounting, 8e PRINCIPLES OF MANAGERIAL ACCT (ACCT 2302) ce Assignment Gradebook ORION Downloadable eTextbook ent OM/Romaining 33 min CALCULATOR MESSAGE HY INSTRUCTOR

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5 Weygandt, Managerial Accounting, 8e PRINCIPLES OF MANAGERIAL ACCT (ACCT 2302) ce Assignment Gradebook ORION Downloadable eTextbook ent OM/Romaining 33 min CALCULATOR MESSAGE HY INSTRUCTOR FULL SCREEN PRINTER VERSTON 4 NEXT Challenge Exercise 7-2 Safe and Secure, Inc. produces three models of home security systems. Information on the three products is given below: Assurance Decoder Burglar Beware Sales $453,000 $755,000 $295,600 Variable expenses 226,500 302,000 206,920 Contribution margin 226,500 453,000 88,680 Fixed expenses 178,300 338,100 145,400 Net income 545,200 $114,900 $(56,720) Fixed expenses consist of $143,000 of common costs allocated to the three products med on relative sales, and additional fixed costs of 14,800 (Amurance), 5120,600 (Decoder), and $52,800 (Burglar Beware). The common costs will be incurred regardless of how many models are produced. The other foxed expenses would be eliminated if a model is phased out. Matt Dillon, an executive with the company with extensive law enforcement background, feels that the Burglar teware line should be discontinued to increase the company's net income Compute current net income for safe and Secure, Inc. (Enter tous uning either a negative in preceding the number o.o. -2,945 or parentheses -(2,945).) Net Income 106380 Compute net income by product line and in total for safe and Secure, Inc., If the company discontinues the Burglar Beware product line. (Hint: Allocate the $443,600 common costs to the two remaining product lines based on their relative sales.) (Enter loss using either a negative sign preceding the number o.. -2,945 or parentheses .. (2,945).) hent 50 PM / Remaining 12 min CALCULATOR MESSAGE MY INSTRUCTOR FULL SCREEN PRINTER VERSION 4 NEXT Compute net income by product Ine and in total for safe and Secure, Inc., if the company discontinues the Burglar Beware product line. (Hint: Allocate the $443,600 common costs to the two remaining product lines based on their relative sales.) (Enter loss using either a negative sign preceding the number e.g. -2,945 ar parentheses e.g. (2,945).) Assurance Decoder Company Total Net income Should Safe and Secure, Inc., eliminate the Burglar Beware product line? Why or why not? Not the total for the company is higher t when the Burglar Beware product line is included. Assume instead that fixed expenses consist of $134,620 of common costs allocated to the three products equally, and additional fixed costs $130,900 (Assurance), $297,600 (Decoder), and $98,680 (Burglar Beware). 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. Compute net income by product line and in total for safe and Secure, Inc., the company discontinues Burglar Beware product line. Should Safe and Secure, Inc., eliminate the Burglar Beware product line? Why or why not? (Enter loss using either a negative sign preceding the number e.g. -2.945 or parentheses a.. (9,945).) Assurance Decoder Company Total Net income Yes the total net income for the company is lower when the Burglar Beware product line is excluded

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