Carla Vista Company reports the following operating results for the month of August: sales $357,000 (units 5,100), variable costs $256,000, and fixed costs $99,000. 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 65% of sales. Compute the net income to be earned under each alternative. 1. Net Income $ 2. Net Income $
Carla Vista Company reports the following operating results for the month of August: sales $357,000 (units 5,100), variable costs $256,000, and fixed costs $99,000. 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 65% of sales. Compute the net income to be earned under each alternative. 1. Net Income $ 2. Net Income $
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 3PB
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Question
Carla Vista Company reports the following operating results for the month of August: sales $357,000 (units 5,100), variable costs $256,000, and fixed costs $99,000. 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 65% of sales. |
Compute the net income to be earned under each alternative.
1.
|
Net Income
|
$
|
||
---|---|---|---|---|
2.
|
Net Income
|
$
|
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