Englehart Inc

question 85

Essay

Englehart Inc. reports the following operating results for the month of August: Sales $450000 (units 5000); variable costs $280000; and fixed costs $115000. 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 $15000.
Instructions
Compute the net income to be earned under each alternative. Which course of action will produce the highest net income?

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Definitions:

Success

The achievement of a goal or the attainment of wealth, position, honors, or the like.

Humanistic Insights

Perspectives and understandings that emphasize personal growth, self-acceptance, and the realization of one's potential, often associated with humanistic psychology.

Julian Rotter

A psychologist known for his development of social learning theory and the concept of locus of control.

Early Interest

Initial curiosity or attention towards a particular subject or activity that could develop into a more profound involvement or expertise.