httpsedugenwileypluscomedugenltmainuni S C Weygandt Manageri

https//edugen.wileyplus.com/edugen/lt/main.uni S C Weygandt, Managerial Accounting, Te System. Announcements (Unread) Return to Blackboard Exercise 191 2 Your answer is partially correct. Try again. Englehart, Inc. reports the following operating results for the month of August: Sales $450,000 (units 5,000); variable costs $280,000; and fixed costs $115,000. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 10% with no change in total variable costs. 2. Reduce variable costs to 65% of sales. 3. Reduce fixed costs by $15,000. Compute the net income to be earned under each alternative. Net Income 1. Increase selling price 1000ool 2. Reduce variable costs 3. Reduce fixed costs d 70000 Which course of action will produce the highest net income? increasing selling price by 10 will produce higest net income. By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Question Attempts: 1 of 2 used SAYE FORLATER SE You have surpassed the number of attempts to eam Maximum Points for this question. For this attempt, and any subsequent attempte you will earn points according to the Point Potential policy set by your instructor. C

Solution

Since the answers to the alternatives of Increasing the selling price and reducing the fixed cost is correct already. So I am hereby working out only alternative of reducing the variable cost:

Sales= 450000

Units= 5000

Variable Cost= 280000

Fixed Cost= 115000

If variable cost is to be reduced to 65% of sales then revised variable cost would be 292500

Revised Statement of Income:

Particulars	Amount
Sales	450000
Variable Cost	(292500)
Fixed Cost	(115000)
Net Income	42500