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Blossom Company reports the following operating results for the month of August: sales $384,000 (units 4,800), variable costs $251,000, and fixed costs $96,000. Management is considering the following independent courses of action to increase net income. 1. 2. 1. 2. Increase selling price by 15% with no change in total variable costs or units sold. Reduce variable costs to 67% of sales. Net Income $enter a dollar amount Net Income $ Which course of action will produce the higher net income? select an option alternative 1 or alternative 2

Blossom Company reports the following operating results for the month of August: sales $384,000 (units 4,800), variable costs $251,000, and fixed costs $96,000. Management is considering the following independent courses of action to increase net income. 1. 2. 1. 2. Increase selling price by 15% with no change in total variable costs or units sold. Reduce variable costs to 67% of sales. Net Income $enter a dollar amount Net Income $ Which course of action will produce the higher net income? select an option alternative 1 or alternative 2

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Blossom Company reports the following operating results for the month of August: sales $384,000 (units 4,800), variable costs $251,000, and fixed costs $96,000. Management is considering the following independent courses of action to increase net income. 1. 2. 1. 2. Increase selling price by 15% with no change in total variable costs or units sold. Reduce variable costs to 67% of sales. Net Income $enter a dollar amount Net Income $ Which course of action will produce the higher net income? select an option alternative 1 or alternative 2
Transcribed Image Text:Blossom Company reports the following operating results for the month of August: sales $384,000 (units 4,800), variable costs $251,000, and fixed costs $96,000. Management is considering the following independent courses of action to increase net income. 1. 2. 1. 2. Increase selling price by 15% with no change in total variable costs or units sold. Reduce variable costs to 67% of sales. Net Income $enter a dollar amount Net Income $ Which course of action will produce the higher net income? select an option alternative 1 or alternative 2
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