Berry Company reports the following operating results for the month of August: sales $345,000 (units 5,000): variable costs $210,000; and fixed costs $75,000. Management is considering the following independent courses of action to increase operating income: 1. Increase the selling price by 7% with no change in total variable costs. 2. Reduce variable costs to 50% of sales. 3. Reduce fixed costs by $15,000. Required: Calculate the operating income to be earned under each alternative. Which course of action will produce the highest operating income?