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Sunland Company reports the following operating results for the month of August: sales $$300,800($units $5,000)$; variable costs $$203,980$; and fuxed costs $$65,800.$ Management is considering the following independent courses of action to increase operating income:

Increase the selling price by $10\%$ with no change in total variable costs.

Reduce variable costs to $65\%$ of sales.

Reduce fixed costs by $$9,400.$

Calculate the operating income that would be earned under each alternative.

Operating income

Alternative $1$$

Alternative $2$$

Alternative $3$$

Which course of action will produce the highest operating income?

will produce the highest operating income.