Question

Yams Company reports the following operating results for the month of August: sales $400,000 (units 5,000), variable costs $240,000, and fixed costs $90,000. 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 or units sold.
2. Reduce variable costs to 55% of sales.

Instructions
Compute the net income to be earned under each alternative. Which course of action will produce the higher net income?



$1.99
Sales3
Views263
Comments0
  • CreatedMarch 02, 2015
  • Files Included
Post your question
5000