Question
Sunland Company reports the following operating results for the month of August: sales $382,500 (units 5,100), variable costs $259,000, and fixed costs $99,000. Management is
Sunland Company reports the following operating results for the month of August: sales $382,500 (units 5,100), variable costs $259,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income.
1. Increase selling price by 12% with no change in total variable costs or units sold.
2. Reduce variable costs to 65% of sales.
Compute the net income to be earned under each alternative.
1. | Net Income | $ | ||
---|---|---|---|---|
2. | Net Income | $ |
Which course of action will produce the higher net income? select an option: Alternative One or Alternative two
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