AutoSave OOD A File Home S Page Layout Excel TemplateAssigment Ch06 (1) - Excel Formulas Data Review View Help Insert Search DYMO Label QuickBooks A15 - X fi 4 A B C D E 1 E6-3 Compute net income under different alternatives 2 Barnes Company reports the following operating results for the month of August: sales $325,000 3 (units 5,000); variable costs $210,000, and fixed costs $75,000. Management is considering the following 4 independent courses of action to increase net income. 51. Increase selling price by 10% with no change in total variable costs or sales volume. 6 2. Reduce variable costs to 58% of sales. 73. Reduce fixed costs by $15,000. 9 Instructions 10 Compute the net income to be eamed under each alternative. Which course of action will produce the 11 highest net income? 12 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?". 17 1 Increase selling price by 10% with no change in total variable costs or sales volume. Current selling price New selling price (Round to nearest cent) Total sales Less: variable costs Contribution margin Less: faed costs Net income Value 302. 32 1) Reduce variable costs to 58% of sales Total Sales Less: variable costs | E6-1 6-3 E6-17 CD-6 Value Value Ready Type here to search Search AutoSave o H File Home Insert O Page Layout ExcelTemplateAssignment_Ch06 (1). Excel Formulas Data Review View Help DYMO Label QuickBooks 1 X f A15 AA . B C D E Total sales Less: variable costs Contribution margin Less: fixed costs Net income Value 302 Reduce variable costs to 58% of sales Total Sales Value Less: variable costs Value Contribution margin Less: fixed costs Net income Value 383 Value Reduce fixed costs by $15,000. Total Sales Less: variable costs Contribution margin Less: foxed costs Net income Value 503. Assume that unit selling price increased 5% with no change in total variable costs or sales volume. Assume variable costs decreased to 53% of sales. Assume that fxed costs increased by $20,000. Which course of action will produce the highest net income? 52 53 E6-1 E6-3 E6-17 CD-6 Ready Type here to search OH Owe