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Cawley Company makes three models of tasers. Information on the three products is given below. Flowd expenses consist of $290,000 of common costs allocated to
Cawley Company makes three models of tasers. Information on the three products is given below. Flowd expenses consist of $290,000 of common costs allocated to the three products based on relative sales as well as direct foud expenses unique to each model of $29,000 (Tingler), $79,000 (Shocker), and $34,000 (Sturiner). The common costs wil be incurred regandless of how mary models are produced. The direct foced expenses would be eliminated if that model lis phased out. James Watt, an executwe with the company, feels the Stunner line should be discontinued to incresse the compan's net income: Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $290,000 common costs to the two remaining product lines based on their relative sales) Tingler Net income Shocker Net income Total Net income $ (c) Should Cawley eliminate the Stunner product line
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