iPad 5:20 PM 57% ) G www.chegg.com WileyPLUS C Dedugen.wileyplus.com/edugen/ti/m

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iPad 5:20 PM 57% ) G www.chegg.com WileyPLUS C Dedugen.wileyplus.com/edugen/ti/main.uni Kimmel, Accounting: Tools for Business Decision Making, Se CALCULATOR PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Exercise 18-15 18 Exercises Your answer is partially correct. Try again. Cottonwood Company reports the following operating results for the month of August: sales $361,900 (units 5,170); variable costs $220,000; and fixed costs $97,570. Management is considering the following independent courses of action to increase net income. a Exercise 18-3 (Part Exercise 18-3 1. Increase selling price by 13% with no change in total variable costs or units sold. 2. Reduce variable costs to 55% of sales. Compute the net income to be earned under each alternative. (Round intermediate calculations to 2 decimal places, e.g. 2.25 and final answers to o decimal places, e.g. 12,125.) 1. Net Income Exercise 18-10 Exercise 18-12 (Part 311377 2. Net Income 65285 Exercise 18-14 (Part Which course of action will produce the highest net income? Exercise 18-14 Click if you would like to Show Work for this question: Open Show Work By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your

Explanation / Answer

Net Income as per Two Options:

Increase Selling price by 13% Reduce variable costs to 55% of Selling price Total Sales 361900 * 1.13 = 408947 361900 Less: Variable costs 220000 =(361900 * 55%) = 199045 Contribution 188947 162855 Less: Fixed Costs 97570 97570 Net Income $91377 $65285

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