Sheridan Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income ro Net income $ (b) (c) Tingler Net Income $ Shocker Net Income Total Net Income Tingler $298,000 > Compute current net income for Sheridan Company. Why or why not? 145,000 Net income would 153,000 $ 120,784 $ $32,216 Fixed expenses consist of $308,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler). $80,400 (Shocker), and $34.500 (Stunner). 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. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. Shocker $502,000 198,600 303,400 235,016 $68,384 Compute net income by product line and in total for Sheridan Company if the company discontinues the Stunner product line. (Hint: Allocate the $308,000 common costs to the two remaining product lines based on their relative sales.) Should Sheridan eliminate the Stunner product line? Stunner $200,000 V from $ 138,500 61,500 96,100 $(34,600) to $

Sheridan Company makes three modets of tasers information on the three products is given below. Faed expenser conist of $309,000 of common costs allocated to the three products based on reiative sales, as well as direct fuxd eqpenses unique to each model of $29.000 (tinglet). $80,400 (Sthocker), and $34.500 (Stunner). The common costs will be incurr ed refardless of how many models are produced. The direct fined opensea would be eliminated if that model is phased out. James Watt an onecutive with the companx, feels the Stunner line should be discontinued to increase the company/s net income. (a) Compute current net income for Sheridan Company. Net income $ (b) Compute net income by product line and in total for Sheridan Company if the company discontinues the Stunner product line. (Hint: Alocate the $309,000 cocrmon costs to the two remaining product lines based on their relative sales) (k) Should Sheridan eliminate the Stumer product line? Why or why not? Net incoene vrould froms tos