Giesen 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 three independent courses of action to increase net income. Compute the net income that would result from each of the independent actions below: 1. Increase selling price by 10% with no change in total variable costs. Answer: $ 2. Reduce variable costs to 58% of sales. Answer: $ 3. Reduce fixed costs by $20,000. Answer: $ Which course of action will produce the highest net income? Answer: 1, 2, or 3?
Paper#11743 | Written in 18-Jul-2015Price : $25