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Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $225,000; and fixed costs $70,900. Management is
Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $225,000; and fixed costs $70,900. Management is considering the following independent courses of action to increase net income.
Exercise 6-3 (Video) Barnes Company reports the following operating results for the month of August: sales $325,000 (units 5,000); variable costs $225,000; and fixed costs $70,900. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. 1. Increase selling price by 10% with no change in total variable costs or sales volume. Net income 2. Reduce variable costs to 59% of sales. Net income 3. Reduce fixed costs by $18,000. Net income Which course of action will produce the highest net income? Click if you would like to Show Work for this question: Open Show Work
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