Kern Company prepared the following tentative budget for next month: Sales.......... Selling price R500 000 R5 per unit Variable expenses ....... R300 000 Fixed expenses...........R150 000 The sales manager argues that the unit selling price could be increased by 20%, with an expected volume decrease of only 10%. If Kern incorporates these changes in its budget, what should be the budgeted net income? A. R120 000 B. R90 000 C. R66 000 D. R145 000

Kern Company prepared the following tentative budget for next month: Sales.......... Selling price R500 000 R5 per unit Variable expenses ....... R300 000 Fixed expenses...........R150 000 The sales manager argues that the unit selling price could be increased by 20%, with an expected volume decrease of only 10%. If Kern incorporates these changes in its budget, what should be the budgeted net income? A. R120 000 B. R90 000 C. R66 000 D. R145 000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 18E: Carmichael Corporation is in the process of preparing next years budget. The pro forma income...

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Kern Company prepared the following tentative budget for next month: Sales ................... R500 000 Selling price ........... R5 per unit Variable expenses ....... R300 000 Fixed expenses .......... R150 000 The sales manager argues that the unit selling price could be increased by 20%, with an expected volume decrease of only 10%. If Kern incorporates these changes in its budget, what should be the budgeted net income? A. R120 000 B. R90 000 C. R66 000 D. R145 000
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Please answer 1d.
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