Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 26-8 Cawley Company makes three models of tasers. Information on the three products is given below Tingler Shocker Stunner $295,000 $497,200 $196,300 147.100 200,700
Exercise 26-8 Cawley Company makes three models of tasers. Information on the three products is given below Tingler Shocker Stunner $295,000 $497,200 $196,300 147.100 200,700 138.200 Contibution margin 147,900 296,500 58,100 94,410 $27,766 $63,744 36,310) Sales Variable expenses Fixed expenses 120,134 232,756 Net income Fixed expenses consist of $303,700 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,500 (Tingler), $80,000 (Shocker), and $34,100 (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's net income Compute current net income for Cawley Company 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 $303,700 common costs to the two remaining product lines based on their relative sales.) (Round answers to the nearest whole dollar, e.g. 5,275.) Tingler Net Income Shocker NetIncome Total Net Income
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started