Compute the net income to be earned under each alternative

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Problem - Carla Vista Company reports the following operating results for the month of August: sales $385,000 (units 5,500), variable costs $250,000, and fixed costs $94,000. 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 56% of sales.

Compute the net income to be earned under each alternative.

Reference no: EM132880529

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