Cowley Company makes three models of tasters. Information on the three products is given below.
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Tingler
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Shocker
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Stunner
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Sales
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$296,800
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$498,880
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$201,230
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Variable expenses
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148,050
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195,810
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142,050
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Contribution margin
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148,750
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303,070
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59,180
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Fixed expenses
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116,005
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225,299
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93,201
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Net income
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$32,745
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$77,771
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$(34,021)
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Fixed expenses consist of $291,400 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,249 (Tingler), $79,475 (Shocker), and $34,381 (Stunner). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out.
James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.
Compute current net income for Cawley Company.
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Net income
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$
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