Cullumber Company reports the following operating results for the month of August: sales $375,000 (units 5,000), variable costs $246,000, and fixed costs $97,000. Management is considering the following independent courses of action to increase net income.

1. Increase selling price by 12% with no charge in total variable costs or units sold.

2. Reduce variable costs to 69% of sales.

Compute the net income to be earned under each alternative.

1. Net Income 2. Net Income