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Compute the net income to be earned under each alternative

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Reference no: EM13512398

Dalton Company reports the following operating results for the month of August: Sales $300,000 (units 5,000); variable costs $210,000; and fixed costs $70,000. 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 sales volume.

2. Reduce variable costs to 58% of sales.
3. Reduce fixed costs by $20,000.

Instructions

Compute the net income to be earned under each alternative. Which course of action will produce the highest net income?

Reference no: EM13512398

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