Question

Coronado Company reports the following operating results for the month of August: sales $310,000 (units 5,000); variable costs $214,000; and fixed costs $71,000. Management is considering the following independent courses of action to increase net income.

Compute the net income to be earned under each alternative.

1. Increase selling price by 10% with no change in total variable costs or sales volume.

Net income

$_______________

2. Reduce variable costs to 57% of sales.

Net income

$_______________

3. Reduce fixed costs by $24,000.

Net income

$enter a net income if the fixed costs are reduced by $24,000 ________________

Which course of action will produce the highest net income? select an alternative with the highest net income
                                                           Alternative 3 /. Alternative 1/. Alternative 2

Answer 1

Note

If you have any queries kindly post a comment, i will solve it earliest.

If you satisfied with my answer, kindly give a thumbs up, it will help to encourage me.