Wildhorse Company reports the following operating results for the month of August: sales $382

Accounting Nov 18, 2020

Wildhorse Company reports the following operating results for the month of August: sales $382.500 (units 5.100). variable costs $253.000. and fixed costs $97.000. Management is considering the following independent courses of action to increase net income.
1. Increase selling price by 12% with no change in total variable costs or units sold. 2. Reduce variable costs to 58% of sales.
Compute the net income to be earned under each alternative.
1. Net Income
778400
2. Net Income $ 701.350
Which course of action will produce the higher net income?

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