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Henderson Farms Reports the Following Results for the Month of November

question 125

Essay

Henderson Farms reports the following results for the month of November: $\begin{array} { l r } \text { Sales (10,000 units) } & \$ 600,000 \\\text { Variable costs } & 420,000 \\\text { Contribution margin } & 180,000 \\\text { Fixed costs } & 110,000 \\\text { Net income } & \$ 70,000\end{array}$ Management is considering the following independent courses of action to increase net income.
1. Increase selling price by 5% with no change in total variable costs.
2. Reduce variable costs to 66 $Henderson Farms reports the following results for the month of November: \begin{array} { l r } \text { Sales (10,000 units) } & \$ 600,000 \\ \text { Variable costs } & 420,000 \\ \text { Contribution margin } & 180,000 \\ \text { Fixed costs } & 110,000 \\ \text { Net income } & \$ 70,000 \end{array} Management is considering the following independent courses of action to increase net income. 1. 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 $10000. Instructions If maximizing net income is the objective which is the best course of action?$ % of sales.
3. Reduce fixed costs by $10000.
Instructions
If maximizing net income is the objective which is the best course of action?

Definitions:

Negative News

Information or updates that are unfavorable, disappointing, or pessimistic.

Awkward Situations

Scenarios that are uncomfortable, embarrassing, or difficult to navigate socially.

Bad News

Refers to information that is unwelcome, disappointing, or distressing.

Planning Process

A series of steps that involve setting goals, establishing strategies, and outlining tasks and schedules to achieve the desired results.