Altac Manufacturing is a company that produces and sells a single product, the "TechThing." The TechThing is manufactured using a combination of labor and materials and is sold to wholesalers and retailers. Altac Manufacturing operates in a highly competitive market, and management is constantly seeking opportunities to improve profitability.

Data Provided: Sales Data: Sales Price per TechThing: $50 Units Sold: 10,000 TechThings Manufacturing Data: Direct Materials Cost per TechThing: $10 Direct Labor Cost per TechThing: $8 Fixed Manufacturing Overhead Costs: $40,000 Operating Expenses: Selling Expenses: $10,000 Administrative Expenses: $15,000

Altac Manufacturing is considering two options to improve profitability: Option 1: Invest in new manufacturing equipment that reduces direct labor costs by 20% OR Option 2: Increase the selling price by 10% to capture a larger market share. Analyze each option separately and recommend the option that would yield the highest increase in net income. Present calculations and reasoning to support your recommendation. You may also attach a document (not required) to support your response.