Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000);...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $215,000; and fixed costs $71,500. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income 38.500 2. Reduce variable costs to 60% of sales. Net income $ 71.000 3. Reduce fixed costs by $21,000. Net income 59500 Which course of action will produce the highest net income? Alternative 1 Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $215,000; and fixed costs $71,500. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income 38.500 2. Reduce variable costs to 60% of sales. Net income $ 71.000 3. Reduce fixed costs by $21,000. Net income 59500 Which course of action will produce the highest net income? Alternative 1
Expert Answer:
Answer rating: 100% (QA)
Sales 325000 Number of units sold 5000 Variable costs 215000 Fixed costs 71500 Selling price per u... View the full answer
Related Book For
Accounting Tools for business decision making
ISBN: 978-0470095461
4th Edition
Authors: kimmel, weygandt, kieso
Posted Date:
Students also viewed these accounting questions
-
Queensland Company reports the following operating results for the month of April. Management is considering the following course of action to increase net income: Reduce the selling price by 4%,...
-
Cottonwood Company reports the following operating results for the month of April. Management is considering the following course of action to increase net income: Reduce the selling price by 10%,...
-
Queensland Company reports the following operating results for the month of April. Management is considering the following course of action to increase net income: Reduce the selling price by 10%,...
-
Calculate the directional derivative in the direction of v at the given point. Remember to use a unit vector in your directional derivative computation. g(x, y, z) = xe-y, v = (1, 1, 1), P = (1,2,0)
-
Kaplan CPA Exam Simulation: Unrecorded Liabilities Required Go to the Kaplan website link at www. mhhe.com/ louwers6e, click on Clients Check Register (Unrecorded Liabilities) AUD TBS, and complete...
-
The following unadjusted trial balance is for Ace Construction Co. as of the end of its 2013 fiscal year. The June 30, 2012, credit balance of the owners capital account was $53,660, and the owner...
-
Which of the following is not a reason an internal auditor should participate in internal control reviews during the design of new systems? a. It is more economical to design controls during the...
-
Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in its...
-
Find the area of the region bounded by x = y and y = x = 6.
-
Bud Peters opened a consulting company, and the following transactions resulted: 1. Bud invested $34,000 in the consulting agency. 2. Bought office equipment on account, $1,000. 3. Agency received...
-
Hamm Corp. purchased a truck on January 1, Year 1 for $100,000. The truck is estimated to have a 10 year life and salvage value of $10,000. The company uses the straight line method. a. At the...
-
You are making a $120,000 investment and feel that a 22% rate of return is reasonable, given the nature of the risks involved. You expect to receive $48,000 in the first year, $54,000 in the second...
-
U . S . tax liability ( before reductions for the foreign tax credit ) is $ 1 2 0 , 7 5 0 . Requirement What is Halo's foreign tax credit? What is Halo's foreign tax credit carryback or carryover?...
-
The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced 1st Quarter 2nd Quarter 3rd...
-
Lindon Company is the exclusive distributor for an automotive product that sells for $32.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $177,600 per year. The company plans...
-
Rios Co . Is a regional insurance company that began operations on January 1 , 2 0 V 2 . The following selected transactions relate to investments acquired by Rios Co , which has a fiscal year ending...
-
4.9 LAB: Sorting TV Shows (dictionaries and lists) Write a program that first reads in the name of an input file and then reads the input file using the file.readlines() method. The input file cont
-
A genetically engineered strain of Escherichia coli (E. coli) is used to synthesize human insulin for people suffering from type I diabetes mellitus. In the following simplified reaction scheme,...
-
Donna Garlands regular hourly wage rate is $16.00, and she receives a wage of 112 times the regular hourly rate for work in excess of 40 hours. During a March weekly pay period, Donna worked 42...
-
In the month of November, Hasbrook Company Inc. wrote checks in the amount of $9,750. In December, checks in the amount of $11,762 were written. In November, $8,800 of these checks were presented to...
-
What is the difference between the current ratio and working capital?
-
Match the internal control function from the left-hand column with the area of responsibility in the ta dedshetak utnisgsee! right-hand column: 1. Prepares deposit receipt. a Retail sales supervisor...
-
Identify the element of the fraud triangle associated with each of the following statements: 1. "I take full responsibility for what happened. But saying that, I know in my mind that I did nothing...
-
Match the activities from column 1 with the activities described in column 2. 1 a. Manage accounts receivable b. Manage inventory levels c. Manage accounts payable d. Invest excess cash 2 1. Acquire...
Study smarter with the SolutionInn App