Transcribed Image Text: 10) The following information has been provided by Arawak Farms Limited for the month of August. Sales ( 10,000 Units ) $

Transcribed Image Text: 10) The following information has been provided by Arawak Farms Limited for the month of
August.
Sales ( 10,000 Units )
$ 600,000
$ 420,000
Variable Costs
Contribution Margin
$ 180,000
$ 110,000
Fixed Costs
Net Income
$ 70,000
Management is considering the following courses of action to increase Net Income:
1) Increase selling price by 5% with no change in variable costs.
2) Reduce variable costs to 66% of sales.
3) Reduce Fixed Costs by $ 10,000.
Required:
a)
Advise management on the best course of action to maximize the net income.
15 Marks

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