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Oriole Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin. Fixed expenses Net income Net income $ (b) Tingler Net Income Shocker Net Income Compute current net income for Oriole Company. Total Net Income Tingler Shocker $304,000 $496,000 145,600 196,000 (c) 158,400 118,768 Why or why not? $39,632 Fixed expenses consist of $292,000 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), $79,200 (Shocker), and $34,400 (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. (a) Net income would 300,000 Compute net income by product line and in total for Oriole Company if the company discontinues the Stunner product line. (Hint: Allocate the $292,000 common costs to the two remaining product lines based on their relative sales.) $ 224,032 $75,968 $ $ Should Oriole eliminate the Stunner product line? Stunner $200,000 Ofrom $ 141,300 58,700 92,800 $(34,100) to $

Oriole Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin. Fixed expenses Net income Net income $ (b) Tingler Net Income Shocker Net Income Compute current net income for Oriole Company. Total Net Income Tingler Shocker $304,000 $496,000 145,600 196,000 (c) 158,400 118,768 Why or why not? $39,632 Fixed expenses consist of $292,000 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), $79,200 (Shocker), and $34,400 (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. (a) Net income would 300,000 Compute net income by product line and in total for Oriole Company if the company discontinues the Stunner product line. (Hint: Allocate the $292,000 common costs to the two remaining product lines based on their relative sales.) $ 224,032 $75,968 $ $ Should Oriole eliminate the Stunner product line? Stunner $200,000 Ofrom $ 141,300 58,700 92,800 $(34,100) to $

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 6PB: Using the information for Lighthizer Trading Company, prepare the income statement to include all...
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Oriole Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income Net income $ (b) Tingler Net Income Shocker Net Income Total Net Income (c) Tingler $304,000 145,600 O 158,400 Compute current net income for Oriole Company. Why or why not? 118,768 Net income would $39,632 Fixed expenses consist of $292,000 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), $79,200 (Shocker), and $34,400 (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. (a) Compute net income by product line and in total for Oriole Company if the company discontinues the Stunner product line. (Hint: Allocate the $292,000 common costs to the two remaining product lines based on their relative sales.) $ Shocker $ $ $496,000 $200,000 196,000 300,000 O 224,032 $75,968 Should Oriole eliminate the Stunner product line? Stunner 141,300 from $ 58,700 92,800 $(34,100) to $
Transcribed Image Text:Oriole Company makes three models of tasers. Information on the three products is given below. Sales Variable expenses Contribution margin Fixed expenses Net income Net income $ (b) Tingler Net Income Shocker Net Income Total Net Income (c) Tingler $304,000 145,600 O 158,400 Compute current net income for Oriole Company. Why or why not? 118,768 Net income would $39,632 Fixed expenses consist of $292,000 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), $79,200 (Shocker), and $34,400 (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. (a) Compute net income by product line and in total for Oriole Company if the company discontinues the Stunner product line. (Hint: Allocate the $292,000 common costs to the two remaining product lines based on their relative sales.) $ Shocker $ $ $496,000 $200,000 196,000 300,000 O 224,032 $75,968 Should Oriole eliminate the Stunner product line? Stunner 141,300 from $ 58,700 92,800 $(34,100) to $
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