4. Kei Co reports the following operating results for the month of February: sales $900,000 (units 15,000); variable costs $472,500; and fixed costs $202,500. Management is considering the following independent courses of action to increase net income. 1. 2. Increase selling price by 2.5% with no change in total variable costs or units sold. Reduce variable costs to 49% of sales. Instructions (a) Compute the net income to be earned under each alternative. Which course of action will produce the highest net income? (10 points) ) (b) Kei's management is looking at longer term solutions to improve net income. One of the options they have reviewed will increase fixed expenses by $27,500 while reducing variable expenses by $2 per unit. Management feels that with these changes the price of the product could be reduced by $1 per unit. The decrease in price will then result in an increase in unit sales of 5%. Compute the net income to be earned under this alternative. (8 points)