ABC Company reports the following operating results for the month of November: sales OMR900,000 (units 15,000); variable costs OMR472,500; and fixed costs OMR202,500. Management is considering the following independent courses of action to increase net income. 1. Increase selling price by 2.5% with no change in total variable costs or units sold. 2. Reduce variable costs to 49% of sales. Instructions (a) Calculate the net income to be earned under each alternative. Which course of action will produce the highest net income? (b) ABCs management is looking at longer-term solutions to improve net income. One of the options they have reviewed will increase fixed expenses by OMR27,500 while reducing variable expenses by OMR2 per unit. Management feels that with these changes the price of the product could be reduced by OMR1 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. Do you recommend this option? Why or why not?