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Compute the net income to be earned under each alternative

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Problem - Sheridan Company reports the following operating results for the month of August: sales $408,000 (units 5,100) variable costs $259,000, and fixed costs $93,000. Management is considering the following independent courses of action to increase net income.

1. Increase selling price by 10% with no change in total variable costs or units sold.

2. Reduce variable costs to 55% of sales.

Required -

1. Compute the net income to be earned under each alternative.

2. Which course of action will produce the higher net income?

Reference no: EM132793233

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