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Bonnie Company manufactures and sells dresses at a variable cost of $24 each and a fixed cost of x. It can sell 7,600 dresses at
Bonnie Company manufactures and sells dresses at a variable cost of $24 each and a fixed cost of x. It can sell 7,600 dresses at a selling price of $52 to earn an operating income of $12,800 (Option 1) or it can sell 6,600 dresses at a selling price of $62 and another 5,600 dresses at a selling price of $48 (Option 2). Which alternative should Bonnie choose?
Option 1 operating income:
Option 2 operating income:
Bonnie should choose (option 1, 2, or neither):
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