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Cawley Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $298,000 $502,000 $200,000 Variable expenses
Cawley Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $298,000 $502,000 $200,000 Variable expenses 154,700 201,500 135,600 Contribution margin 143,300 300,500 64,400 Fixed expenses 120,784 235,216 96,000 Net income $22,516 $65,284 $(31,600) Fixed expenses consist of $308,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $80,600 (Shocker), and $34,400 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that 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. (a) Compute current net income for Cawley Company. Net income +A $ 56200
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