Henderson Farms reports the following results for the month of November:Sales (10,000 units)Variable costsContribution marginFixed costsNet income$600,0001.420,000180,000110,000$70,000Management is considering the following independent courses of action to increase net income.Increase selling price by 5% with no change in totalvariable costs.2. Reduce variable costs to 66% of sales.3. Reduce fixed costs by $10,000. Calculate net income for the above courses of action.Course1. Increase selling price $2. Reduce variable costReduce fixed cost69Best course of action is$tANet IncomeIf maximizing net income is the objective, which is the best course of action?

Income statement is a financial statement that shows profitability, total revenue and total expenses…

Answered: Henderson Farms reports the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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