Compute the net income to be earned under each alternative

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Reference no: EM131262880

Barnes Company reports the following operating results for the month of August: sales $315,000 (units 5,000); variable costs $225,000; and fixed costs $71,100. 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.

Net income=

2) Reduce variable costs to 56% of sales.

Net Income =

3) Reduce fixed costs by $21,000.

Net Income=

Which course of action will produce the highest net income?

Alternative1

Alternative2

Alternative3

Reference no: EM131262880

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