A B C D Moran Company reports the following operating results for the month of August: \begin{tabular}{lr|} \hline Amount \\ \hline Sales: & 5,000 units \\ \hline Sales: & $310,000 \\ \hline Variable costs & $217,000 \\ Fixed costs & $70,000 \\ \hline \end{tabular} Management are considering the following independent courses of action to increase net income: 1 Increase the selling price by 10% with no change in total variable costs 2 Reduce variable costs to 65% of sales. Instructions: 12 Compute the operating income to be earned under each alternative. \begin{tabular}{l|c} New operating income: & Formula \\ Title & \multicolumn{1}{c}{100%} \\ Less: Title & Amount \\ \cline { 2 - 2 } Title & Formula \\ Less: Title & Amount \\ Title & Formula \\ \hline 2. New operating income: & \\ Title & Amount \\ Less: Title & Formula \\ Title & Formula \\ Less: Title & Amount \\ Title & Formula \\ \hline \end{tabular} Which course of action will produce the highest operating income