Larue Company Reports the Following Operating Results for the Month

question 204

Essay

Larue Company reports the following operating results for the month of August: Sales $300,000 (units 5,000); variable costs $210,000; and fixed costs $70,000. 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 $10,000.
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:

Religious Life

The aspect of an individual's or community's existence that pertains to their beliefs, practices, and organizational involvement in religion or spirituality.

Slave Family

A familial unit formed by enslaved people, often facing challenges in maintaining stable relationships due to the conditions of slavery, such as separations and sales.

Historical Significance

The importance or impact of an event, person, or place in history, contributing to our understanding of the past.

Southern Slavery

The institution of forced labor and servitude that existed in the Southern United States until the end of the Civil War in 1865, where African Americans were held as slaves.