Ivanhoe, Inc. reports the following operating results for August: sales $456,000 (units 5,700); variable costs $273,600; and fixed costs $102,600. Management is considering the following independent courses of action to increase net income.

1. Increase the selling price by 10%

2. Reduce variable cost to 55% of sales.

3. reduce fixed costs by $22,000

Compute the net income to be earned under each alternative.

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

Which course of action will produce the highest net income?