Wildhorse Company reports the following operating results for the month of August: sales $441,000 (4,900 units),...

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Wildhorse Company reports the following operating results for the month of August: sales $441,000 (4,900 units), variable costs $261,000, and fixed costs $93,000. Management is considering the following independent courses of action to increase net income. 1. Increase the unit selling price by 10% with no change in total variable costs, fixed costs, or units sold. 2. Reduce variable costs to 58% of sales while holding fixed costs, quantity, and unit selling price constant. 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? Wildhorse Company reports the following operating results for the month of August: sales $441,000 (4,900 units), variable costs $261,000, and fixed costs $93,000. Management is considering the following independent courses of action to increase net income. 1. Increase the unit selling price by 10% with no change in total variable costs, fixed costs, or units sold. 2. Reduce variable costs to 58% of sales while holding fixed costs, quantity, and unit selling price constant. 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?

Answer rating: 100% (QA)

Answer To calculate the net income under each alternative we can use the following ... View the full answer