division is discontinued. l $20,000 fixed. None of the Per 00 variable and $15,000 fixed, and oper s ht about eliminating the Percy Division? Prepare a schedule to support y None of the Percy Division's fixed s Veronica right Company makes three models of tasers. Information on the repare a schedule to support your 16 Cawley 20- given below. Information on the three products Use incremental analysis for elimination of a product line. (LO 6), AN Tingler $300,000 $500,000 $200 1) es Shocker Stunner Variable expenses 150,000 150,000 120,000 $ 30,000 70.000 (40,000) 0,000 145,000 55,000 95,000 Contribution margir 200,000 300,000 Fixed expenses Net income 230,000 es consist of $300,000 of common costs allocated to the three products based relative sales, and additional fixed expenses of $30,000 (Tingler), $80,000 (Shocker) 5.000 (Stunner). The common costs will be incurred regardless of how many mod- duced. The other fixed expenses would be eliminated if a model is phased out. s the Stunner line should be discon- els are James Watt, an executive with the company, feel tinued to increase the company's net income. Instructions (a) Compute current net income for Cawley Company. Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $300,000 common costs to the two remaining product lines based on their relative sales.) E20-17 Tharp Company operates a small factory in which it manufactures two products: Prepare incremental analbysis C and D. Production and sales results for last year were as follows. (c) Should Cawley eliminate the Stunner product line? Why or why not? concerning keeping or dropping a product to maximize operating income. (LO 6), AN 20,000 40 9,000 Units sold