Function: SUM; Formula: Add, Divide, Subtract, Multiply; Cell Referencing

Using Excel For Incremental Analysis for Elimination of a Product Line

PROBLEM

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

$\backslash$table$[[,$Tingler,Shocker,Stunner$],[$Sales$,$$$,300,000,$$$,500,000,$$$,200,000],[$Variable expenses,,$150,000,,200,000,,145,000],[$Contribution margin,,$150,000,,300,000,,55,000],[$Fixed expenses,,$120,000,,230,000,,95,000],[$Net income,$$,30,000,$s$,70,000,$$$,(40,000)]]$

Fixed expenses consist of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model. 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. These fixed expenses are presented ram

Allocated fixed common costs

Direct fixed expenses:

Tingler

Shocker

Stunner

James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company's net income.

$.$

$31$

$3$

$34$

$35$

$36$

$37$

$38$

$39$

$40$

$41$

$42$