Reference no: EM13523221

The Unruh Company reports the following results for the month of November:

Sales (10,000 units) $600,000
Variable costs 420,000
Contribution margin 180,000
Fixed costs 110,000
Net income $ 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.

2. Reduce variable costs to 60% of sales.

3. Reduce fixed costs by $30,000.

Instructions:

If maximizing net income is the objective, which is the best course of action? Show all of your computations.