Exercise 191 Englehart, Inc. reports the following operating results for the month of August: Sales $450,000 (units 5,000); variable costs $280,000; and fixed costs $115,000. Management is considering the following independent courses of action to increase net income.

1.	Increase selling price by 10% with no change in total variable costs.
2.	Reduce variable costs to 60% of sales.
3.	Reduce fixed costs by $15,000.

Compute the net income to be earned under each alternative.

Net Income
1.	Increase selling price	$
2.	Reduce variable costs	$
3.	Reduce fixed costs	$

Which course of action will produce the highest net income?

Reducing fixed cost by $15,000Increasing selling price by 10%Reducing variable cost to 65%

, will produce higest net income.