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Oriole Farms reports the following results for the month of November: Sales (11,400 units) $684,000 Variable costs 478,800 Contribution margin 205,200 Fixed costs 125,400 Net
Oriole Farms reports the following results for the month of November: Sales (11,400 units) $684,000 Variable costs 478,800 Contribution margin 205,200 Fixed costs 125,400 Net income $ 79,800 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. Course Net Income 1. Increase selling price $ 2. Reduce variable cost $ 3. Reduce fixed cost $ If maximizing net income is the objective, which is the best course of action? Best course of action is
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