The common costs will be incurred regardless of how many

Assignment Help Accounting Basics
Reference no: EM13483359

Cawley Company makes three models of tasers. Information on the three products is given below.



Tingler
Shocker
Stunner

Sales
$296,470
$496,050
$204,050

Variable expenses
146,080
192,430
140,600

Contribution margin
150,390
303,620
63,450

Fixed expenses
117,046
227,180
95,191

Net income
$  33,344
$  76,440
$ (31,741)

 

Fixed expenses consist of $294,100 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,554 (Tingler), $80,790 (Shocker), and $34,973 (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.Current Net Income =78,043

Compute net income by product line and in total for Cawley Company if the company discontinues the Stunner product line. (Hint: Allocate the $294,100 common costs to the two remaining product lines based on their relative sales.) (Round answers to the nearest whole dollar, e.g. 5,275.)

Tingler Net Income = ?

Schocker Net Income = ?

Total Net Income= ?

Reference no: EM13483359

Questions Cloud

What is the balance of the stock investments account on : rosen company purchased 35000 shares of common stock of corporation as a long-term investment for 800000. during the
The most appropriate discount rate to use when applying a : 1. the most appropriate discount rate to use when applying a fcfe valuation model is the .required rate of return on
The research department has developed a new product c as a : roland company operates a small factory in which it manufactures two products a and b. production and sales result for
The company expects to earn 15 percent before interest and : the calgary company is attempting to establish a current assets policy. fixed assets are 600000 and the firm plans to
The common costs will be incurred regardless of how many : cawley company makes three models of tasers. information on the three products is given
What are the advantages of matching the maturities of : what are the advantages of matching the maturities of assets and liabilities? what are the
While state and local governments are encouraged to : while state and local governments are encouraged to prepare a complete cafr what are the minimum requirements per gaap?
The research department has developed a new product e as a : twyla company operates a small factory in which it manufactures two products c and d. production and sales results for
Howell corporation purchased 350000 of its bonds on june 30 : presented below are three independent situations a howell corporation purchased 350000 of its bonds on june 30 2010 at

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  How is the value of a bond determined

How is the value of a bond determined? What is the value of a 10- year, $1000 par value bond with a 10% annual coupon if its required rate of return is 10%

  What is normans earnings per share

Norman Corporation had 250,000 shares of common stock outstanding during the year. Norman declared and paid cash dividends of $200,000 on the common stock and $160,000 on the preferred stock. Net income for the year was $880,000. What is Norman's ..

  What is the payback period for this project if the cash

you are considering a project with an initial cost of 7500. what is the payback period for this project if the cash

  Exchange rates relative to the transaction

Exchange rates relative to the transaction

  Prepare regal flair enterprisess responsibility income

regal flair enterprise has two product lines jewelry and womensapparel. cost and revenue data for each product line for

  Economic-order-quantity model to determine optimal order

Clothes, Inc., has an average annual demand for red, medium polo shirts of 25,000 units. The cost of placing an order is $80 and the cost of carrying one unit in inventory for one year is $25. a. Use the economic-order-quantity model to determine ..

  Prepare a schedule indicating total cash collections for

door amp window co. was organized on august 1 of the current year. projected sales for the next three months are as

  Possibility of investing

Megan Brink is offered the possibility of investing $6,651 today at 6% interest per year in a desire to accumulate $10,000. How many years must Brink wait to accumulate $10,000?

  Determining the return on investment

Randall Company makes and distributes outdoor play equipment. Last year sales were $2,400,000, operating income was $600,000, and the assets used were $3,000,000.The return on investment (ROI) is:

  Purchase price in the consolidated financial statement

How should you account for the difference between the carrying value and the purchase price in the consolidated financial statements for 2011?

  What financial ratio is most commonly used to evaluate

what financial ratio is most commonly used to evaluate charitable organizations? Why is this an important ratio to use for evaluation of the viability and strength of a non profit organization?

  Secular electric has total equity of 560000 sales of

secular electric has total equity of 560000 sales of 2250000 current assets of 700000 and total liabilities of 435000.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd