Exercise 20-3 your answer is correct. Norton Company reports the following operating results for the month of August: Sales $310,000 (units 5,000); variable costs $210,000; and fixed costs $75,000. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. I. Increase selling price by with no change in total variable costs or sales volume. Net income 2. Reduce variable costs to of sales. Net income 3. Reduce fixed costs by $20,000. Net income Which course of action will produce the highest net income? Exercise 20-3 your answer is correct. Norton Company reports the following operating results for the month of August: Sales $310,000 (units 5,000); variable costs $210,000; and fixed costs $75,000. Management is considering the following independent courses of action to increase net income. Compute the net income to be earned under each alternative. I. Increase selling price by with no change in total variable costs or sales volume. Net income 2. Reduce variable costs to of sales. Net income 3. Reduce fixed costs by $20,000. Net income Which course of action will produce the highest net income?