Safe and Secure, Inc. produces three models of home security systems. Information on the three products is given below: Sales Variable expenses Contribution margin Fixed expenses Net income Assurance $448,800 224,400 224,400 182,400 $42,000 Decoder $748,000 299,200 448,800 349,500 $99,300 Burglar Beware $294,900 206,430 88,470 140,100 $(51,630) Fixed expenses consist of $456,600 of common costs allocated to the three products based on relative sales, and additional fixed costs of $45,200 (Assurance), $118,000 (Decoder), and $52,200 (Burglar Beware). 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. Matt Dillon, an executive with the company with extensive law enforcement background, feels that the Burglar Beware line should be discontinued to increase the company's net income. Compute current net income for Safe and Secure, Inc. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) $ Net income Compute net income by product line and in total for Safe and Secure, Inc., if the company discontinues the Burglar Beware product line. (Hint: Allocate the $456,600 common costs to the two remaining product lines based on their relative sales.) (Enter loss using either a negative sign preceding the number eg.-2,945 or parentheses e.g. (2,945).) Assurance Decoder Company Total Net income $ A Compute net income by product line and in total for Safe and Secure, Inc., if the company discontinues the Burglar Beware product line. (Hint: Allocate the $456,600 common costs to the two remaining product lines based on their relative sales.) (Enter loss using either a negative sign preceding the number e.g.-2,945 or parentheses e.g. (2,945).) Assurance Decoder Company Total Net income $ $ $ Should Safe and Secure, Inc., eliminate the Burglar Beware product line? Why or why not? , the total for the company is when the Burglar Beware product line is included. Assume instead that fixed expenses consist of $151,430 of common costs allocated to the three products equally, and additional fixed costs of $129,300 (Assurance), $292,900 (Decoder), and $98,370 (Burglar Beware). 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. Compute net income by product line and in total for Safe and Secure, Inc., if the company discontinues Burglar Beware product line. Should Safe and Secure, Inc., eliminate the Burglar Beware product line? Why or why not? (Enter loss using either a negative sign preceding the number e.g.-2,945 or parentheses e.g.(2,945).) Assurance Decoder Company Total Net income $ $ $ $ the total net income for the company is V when the Burglar Beware product line is excluded
