QI A co produces three separate products from a common process costing S100,000. Each of the products can be sold at the split-off point or can be processed further and then sold for a higher price. Shown below are cost and selling price data for a recent period. Sales Value Cost to Sales Value at Split-Off Process after Further Point Further Processing Product 10 $60,000 $100,000 $190,000 Product 12 15,000 30,000 35,000 Product 14 55,000 150,000 215,000 Instructions (a) Determine total net income if all products are sold at the split-off point. (b) Determine total net income if all products are sold after further processing. (c) Using incremental analysis, determine which products should be sold at the split-off point and which should be processed further. Q2: 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 $330,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $30,000 (Tingler), $50,000 (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's net income. Instructions (a) Compute current net income for Cawley Company. (b) 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.) (c) Should Cawley eliminate the Stunner product line? Why or why not