Crane Company reports the following operating results for the month of August: sales $392,000 (units 4,900), variable costs $254,000, and fixed costs $91,000. Management is considering the following independent courses of action to increase net income. 1.   Increase selling price by 15% with no change in total variable costs or units sold. 2.   Reduce variable costs to 68% of sales. (A) Compute the net income to be earned under each alternative. 1.   Net Income   $enter a dollar amount  2.   Net Income   $enter a dollar amount  (B) Which course of action will produce the higher net income? select an option : Alternative 1Alternative2

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Crane Company reports the following operating results for the month of August: sales $392,000 (units 4,900), variable costs $254,000, and fixed costs $91,000. Management is considering the following independent courses of action to increase net income.

1.   Increase selling price by 15% with no change in total variable costs or units sold.
2.   Reduce variable costs to 68% of sales.


(A) Compute the net income to be earned under each alternative.

1.   Net Income  
$enter a dollar amount 
2.   Net Income  
$enter a dollar amount 


(B) Which course of action will produce the higher net income? select an option : Alternative 1Alternative2

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