Wildnorse Company reports the following operating results for the month of August: sales $441,000 (4,900 units), variable costs $261,000, and fixed costs $93,000. 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 58% of sales while holding fixed costs, quantity, and unit selling price constant. Compute the net income to be earned under each alternative. 1. Net income $ 2. Net income 92,220 %24

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Wildhorse Company reports the following operating results for the month of August: sales $441,000 (4,900 units), variable
costs $261,000, and fixed costs $93,000. 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 58% of sales while holding fixed costs, quantity, and unit selling price constant.
Compute the net income to be earned under each alternative.
1.
Net income
2.
Net income
92,220
%24
%24
Transcribed Image Text:Wildhorse Company reports the following operating results for the month of August: sales $441,000 (4,900 units), variable costs $261,000, and fixed costs $93,000. 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 58% of sales while holding fixed costs, quantity, and unit selling price constant. Compute the net income to be earned under each alternative. 1. Net income 2. Net income 92,220 %24 %24
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