Crane Company reports the following operating results for the month of August: sales $$315,000($units $5,000)$; variab costs $$216,000$; and fixed costs $$70,800.$ Management is considering the following independent courses of action to increase net income.

Compute the net income to be earned under each alternative.

Increase unit selling price by $10\%$ with no change in total variable costs or sales volume.

Net income $

$2.$ Reduce variable costs to $57\%$ of sales.

Net income $

$3.$ Reduce fixed costs by $$25,000.$

Net income

Which course of action will produce the highest net income?