Barnes Company reports the following operating results for the month of August: sales $320,000 (units 5,000); variable
Question:
Barnes Company reports the following operating results for the month of August: sales $320,000 (units 5,000); variable costs $216,000; and fixed costs $70,500. 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 | $enter the net income that will be earned under the first Alternative |
2. Reduce variable costs to 56% of sales.
Net income | $enter the net income that will be earned under the second Alternative |
3. Reduce fixed costs by $22,000.
Net income | $enter the net income that will be earned under the third Alternative |
Which course of action will produce the highest net income? select an Alternative that will produce the highest net income Alternative 1Alternative 3Alternative 2
Financial and Managerial Accounting
ISBN: 978-1118334263
2nd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso