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Cawley Company makes three models of tasers. Information on the three products is given below. Cawley Company makes three models of tasers. Information on the

Cawley Company makes three models of tasers. Information on the three products is given below.

Cawley Company makes three models of tasers. Information on the three products is given below.
Tingler Shocker Stunner
Sales $301,710 $501,340 $198,620
Variable expenses 150,030 191,690 144,080
Contribution margin 151,680 309,650 54,540
Fixed expenses 121,704 233,590 94,792
Net income $29,976 $76,060 $(40,252)
Fixed expenses consist of $305,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,836 (Tingler), $80,936 (Shocker), and $34,314 (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

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