The following data is related to sales and production for Blue sky company for last...
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The following data is related to sales and production for Blue sky company for last year. Selling price per unit OMR140 Variable manufacturing costs per unit OMR62 Variable selling and administrative expenses per unit OMR6 Fixed manufacturing overhead (in total) OMR32,000 Fixed selling and administrative expenses (in total) OMR6000 Units produced during the year 2000 Units sold during year 900 a) Using variable costing, what is the operating income for last year? b) Management is considering the following courses of actions to increase net income: Increase selling price by 15% with no change in variable costs. Decrease variable costs to 40% of sales. Decrease fixed manufacturing costs by 28000. If the management is aiming to maximize the net income, which one is the best course of action? Present all of your calculations.
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