Question

NAGERTAL ACCOUNTING (ACCT 105) Assignment Gradebook ORION Downloadable eTextbook nment NEXT Question 1 Cawley Comp any makes three models of tasers. Information on the three products is given below. Sales Variable expenses 154,900 203,300 Contribution margin 149,600 293,400 Fixed expenses Net income Tingler Shocker Stunner $304,500 $496,700 $195,700 135,200 60,500 119,924 226,183 92,693 $29,676 $67,217 $(32,193) Fixed expenses consist of $294,400 of common costs eliminated if a model is phased out. James Watt, allocated to the three products based on relative sales, and additional fixed expenses of $30,000 (Tingler), hocker), and $34,900 (Stunner). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be an executive with the company, feels the Stunner line should be discontinued to increase the company's net income. Compute current net income for Cawley Company Net income net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $294,400 common the two remaining product lines based on their relative sales.) (Round answers to the nearest whole dollar, e.g. 5,275.) Compute 4.24.6.2 All Rights Reserved. A Division of t/aglist.uni?id-a acBook Pro

Answer 1

Statement of Net Income Particulars Sales Amount Tingler Shocker Stunner 304500 496700 195700 996900 Variable Cost Tingler Shocker Stunner 154900 203300 135200493400 Fixed Expenses Tingler Shocker Stunner 30000 79500 34900 Common expenses 294400 438800 Net Income 64700 Statement of Net Income when Stunner is Discontinued Particulars Sales Less: Variable Cost Contribution Less: Fixed Expenses Tingler Shocker Total 3,04,500 4,96,700 8,01,200 (1,54,900) (2,03,300) (3,58,200) 1,49,600 2,93,400 4,43,000 Specific 79,500 1,09,500 Common expenses 1,11,888 1,82,512 2,94,400 (1,41,888) (2,62,012) (4,03,900) 31,388 39,100 30,000 Net Income 7,712