Cullumber Company reports the following operating results for the month of August: sales $357,000 (5,100 units), variable costs $259,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income. 1. 2. Increase the unit selling price by 10% with no change in total variable costs, fixed costs, or units sold. Reduce variable costs to 66% of sales while holding fixed costs, quantity, and unit selling price constant.
Cullumber Company reports the following operating results for the month of August: sales $357,000 (5,100 units), variable costs $259,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income. 1. 2. Increase the unit selling price by 10% with no change in total variable costs, fixed costs, or units sold. Reduce variable costs to 66% of sales while holding fixed costs, quantity, and unit selling price constant.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cullumber Company reports the following operating results for the month of August: sales $357,000 (5,100 units), variable costs
$259,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income.
1.
Increase the unit selling price by 10% with no change in total variable costs, fixed costs, or units sold.
2.
Reduce variable costs to 66% of sales while holding fixed costs, quantity, and unit selling price constant.
red under each alternative
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