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Sunland Company reports the following operating results for the month of August: sales $325,000 {units 5,000); variable costs $213,000; and xed costs $71,600. Management is
Sunland Company reports the following operating results for the month of August: sales $325,000 {units 5,000); variable costs $213,000; and xed costs $71,600. 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 unit selling price by 10% with no change in total variable costs or sales volume. Net income 35 2. Reduce variable costs to 58% of sales. Net income $ 3. Reduce xed costs by $24,000. Net income $ Which course of action will produce the highest net income? v
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