Kimmel, Accounting, 6e
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Barnes Company reports the following operating results for the month of August: sales $300,000 (units 5,000); variable costs $225,000; and fixed costs $71,400.
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 selling price by 10% with no change in total variable costs or sales volume.
2. Reduce variable costs to 56% of sales.
3. Reduce fixed costs by $24,000.
Which course of action will produce the highest net income? :…….
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