What is the current net income for the company

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Question: Sunak Company sells different styles of tumblers. Below are the sales for the different models. Model A Tumbler Model B Tumbler Model C Tumbler Sales $297,000 $496,900 $201,800 Variable expenses 145,000 198,600 138,500 Contribution margin 152,000 298,300 63,300 Fixed expenses 120,000 235,000 97,000 Net income $32,000 $63,300 $(33,700) Fixed expenses consist of $308,100 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $29,000 (Model A), $80,400 (Model B), and $34,500 (Model C). 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. The company is trying to evaluate whether it should discontinue Model C. What is the current net income for the company? What is the net income after the company discontinues Model C? Should the company discontinue Model C?

Reference no: EM133662612

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