Meta Companys current level of sales and profitability is the subject of management analysis. The companys selling price is $60, 40% cost ratio and $65,000 in fixed costs at its current volume of 5,000 units sold. Required: 1. The marketing manager proposes to increase the selling price by 10% and decrease variable costs by 5% with an expected 8% increase in sales volume. How much is the net operating income under this scenario?

2. The chief finance officer proposes cost reduction strategies that will bring down variable cost ratio to 32% and decrease fixed costs by 20%. How much is the net operating income under this scenario?