Riverbed Company reports the following operating results for the month of August: sales $347,900(units4,900), variable costs $255,000, and fixed costs $93,000. Management is considering the following independent courses of action to increase net income.

1.

Increase selling price by10% with no change in total variable costs or units sold.2.

Reduce variable costs to63% of sales.

Compute the net income to be earned under each alternative. (Round intermediate calculations to 2 decimal places e.g. 2.25 and final answer to 0 decimal places, e.g. 12,125.)

1.

Net Income

$

enter a dollar amount

2.

Net Income

$

enter a dollar amount

Which course of action will produce the higher net income?

select an alternative