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Compute current net income for Cawley Company.

Compute current net income for Cawley Company.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cawley Company makes three models of tasers. Information on the three products is given below.

Cawley Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income Tingler $300,000 (a) 151,100 148,900 120,000 Shocker $500,000 195,300 304,700 229,600 $28,900 $75,100 Stunner $200,000 138,700 61,300 Compute current net income for Cawley Company. 94,100 Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $30,000 (Tingler), $79,600 (Shocker), and $34,100 (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. $(32,800)
Transcribed Image Text:Cawley Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income Tingler $300,000 (a) 151,100 148,900 120,000 Shocker $500,000 195,300 304,700 229,600 $28,900 $75,100 Stunner $200,000 138,700 61,300 Compute current net income for Cawley Company. 94,100 Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $30,000 (Tingler), $79,600 (Shocker), and $34,100 (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. $(32,800)
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compute the net income by product line and in total for kollyy company of the company discontinues this done or product line hint I locate the $300,000 common cost to the two remaining part of bryan's based on the relevant sales. 

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