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Cawley Company makes three models of tasers. Information on the three products is given below. Tingler Shocker Stunner Sales $300,000 $500,000 $200,000 Variable expenses 150,000

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

Tingler Shocker Stunner
Sales $300,000 $500,000 $200,000
Variable expenses 150,000 200,000 145,000
Contribution margin 150,000 300,000 55,000
Fixed expenses 120,000 230,000 95,000
Net income $ 30,000 $ 70,000 $ (40,000)

Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $30,000 (Tingler), $80,000 (Shocker), and $35,000 (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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