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Function: SUM; Formula: Add, Divide, Subtract, Multiply, Cell Referencing Using Excel For Incremental Analysis for Elimination of a Product Line Cawley Company makes three
Function: SUM; Formula: Add, Divide, Subtract, Multiply, Cell Referencing Using Excel For Incremental Analysis for Elimination of a Product Line Cawley Company makes three products is given below Sales PROBLEM models of tasers information on the three Tingler Shocker Stunner $ 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 common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model. 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. These fixed expenses are presented here. Allocated fixed common costs Direct fixed expenses Tingler Shocker Stunner $ 300,000 30,000 80,000 35,000 James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income Student Work Area Required: Provide input into cells shaded in yellow in this empate Use mathematical formulas with cell references to the Problem or work a indicated. Use the SUM function with cal references to add amounts as indicated Compute current net income for Cewe Company Current net income .000 b. Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product ine (Hint Alocate the $300,000 common costs to the two remaining product lines based on their relative sales) Common cost allocation Sales Variable expenses Fixed expenses Contribution margin Net income Tinger Tingler Shocker Total Should Cawley eliminate the Stunner product line? Why or why not? Cawley because eliminating will cause An elimination would res margin of of fixed expenses The Stuer praduct e contribution
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