Henderson Farms reports the following results for the month of November: Sales (10,000 units) Variable costs Contribution margin Fixed costs Net income $600,000 1. 420,000 180,000 110,000 $70,000 Management is considering the following independent courses of action to increase net income. Increase selling price by 5% with no change in total variable costs. 2. Reduce variable costs to 66% of sales. 3. Reduce fixed costs by $10,000.
Henderson Farms reports the following results for the month of November: Sales (10,000 units) Variable costs Contribution margin Fixed costs Net income $600,000 1. 420,000 180,000 110,000 $70,000 Management is considering the following independent courses of action to increase net income. Increase selling price by 5% with no change in total variable costs. 2. Reduce variable costs to 66% of sales. 3. Reduce fixed costs by $10,000.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...
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