Exercise 191 Englehart, Inc. reports the following operating results for the month of August: Sales $450,000 (units 5,000); variable costs $280,000; and fixed costs $115,000. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 10% with no change in total variable costs. 2. Reduce variable costs to 65% of sales. 3. Reduce fixed costs by $15,000. Compute the net income to be earned under each alternative. Net Income 1. Increase selling price 2. Reduce variable costs %24 3. Reduce fixed costs 24 Which course of action will produce the highest net income? will produce higest net income. Click if you would like to Show Work for this question: Open Show Work

Exercise 191 Englehart, Inc. reports the following operating results for the month of August: Sales $450,000 (units 5,000); variable costs $280,000; and fixed costs $115,000. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 10% with no change in total variable costs. 2. Reduce variable costs to 65% of sales. 3. Reduce fixed costs by $15,000. Compute the net income to be earned under each alternative. Net Income 1. Increase selling price 2. Reduce variable costs %24 3. Reduce fixed costs 24 Which course of action will produce the highest net income? will produce higest net income. Click if you would like to Show Work for this question: Open Show Work

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $520,800, a unit variable cost of $62, and a unit selling price of $93. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize operating income of $120,900. units
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Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $300,000, a unit variable cost of $41, and a unit selling price of s61. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize operating income of $70,000. units
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