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Compute the net income to be earned

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Question - Cottonwood Company reports the following operating results for the month of August: sales $395,200 (units 4,940); variable costs $216,000; and fixed costs $94,200. 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 12% with no change in total variable costs or units sold.

2. Reduce variable costs to 48% of sales.

Reference no: EM132747651

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