m/homework-help/pri Time: 04:32 PM/Remaining: 53 min, CALCULATOR ILL SCREEN PRIN
ID: 2538908 • Letter: M
Question
m/homework-help/pri Time: 04:32 PM/Remaining: 53 min, CALCULATOR ILL SCREEN PRINTER VE RSION BACK NEXT Exercise 191 Englehart, Inc. reports the following operating results for the month of August: Sales $450,000 (units 5,000); variable costs $280,000; and fixed costs $115,000. Management is considering the following independent courses of action to increase net income. when preparing a flexi Bookmark 1. Increase selling price by 10% with no change in total variable costs. 2. Reduce variable costs to 65% of sales. 3. Reduce fixed costs by $15,000. ep solution Compute the net income to be earned under each alternative. Net Income of 2 1. Increase selling price s 2. Reduce variable costs s 3. Raduce fixed costss a flexible budget: which the company ex hits helps an easy comp Which course of action will produce the highest net income? will produce higest net income Reduong variable cost to 69% Increasing seling price by 10% Reducing fixed cost by $15,000 Question Attempts: 0 of 1 used SAVE FR LATER SUBMIT ANSWER of 2Explanation / Answer
Answer:-
Explanation:-New selling price per unit in Action plan 1 = ($450000/5000 units)*110% =$99 per unit
Alternative 1 will provide a higher net income henec company should their selling price by 10%.
Englehart Inc. Computation of Net Income earned under each alternative Particulars Action 1 Action 2 Action 3 $ $ $ Sales $99 per unit*5000 units = 495000 450000 450000 Less:- Variable costs 280000 450000*65% =292500 280000 Contribution 215000 157500 170000 Less:- Fixed costs 115000 115000 115000-15000=100000 Net Income 100000 42500 70000Related Questions
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