Return to Blackboard Kimmel, Accounting, 6e Help I System Announcements ent Exer

Question

Return to Blackboard Kimmel, Accounting, 6e Help I System Announcements ent Exercise 19-3 Barnes Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $222,000; and fixed costs $71,900. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. I Increase selling price by 10% with no change in total variable costs or sales volume Net income 2. Reduce variable costs to 60% of sales. Net income 3. Reduce fixed costs by $19,000. Net income s Which course of action will produce the highest net income? LINK TO TEXT

Explanation / Answer

1 Net income=(300000*1.1)-222000-71900= $36100 2 Net income=300000-(300000*60%)-71900= $48100 3 Net income=300000-222000-(71900-19000)= $25100 Alternative 2 will produce higher net income

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.