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Henderson Farms reports the following results for the month of November: Sales (10,000 units) $600,000 Variable costs 420,000 Contribution margin 180,000 Fixed costs 110,000 Net
Henderson Farms reports the following results for the month of November:
Sales (10,000 units) | $600,000 | ||
Variable costs | 420,000 | ||
Contribution margin | 180,000 | ||
Fixed costs | 110,000 | ||
Net income | $ 70,000 |
Management is considering the following independent courses of action to increase net income.
1. | Increase selling price by 5% with no change in total variable costs. | |
2. | Reduce variable costs to 66 /% of sales. | |
3. | Reduce fixed costs by $10,000. |
Calculate net income for the above courses of action.
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