Sandhill Company reports the following operating results for the month of August: sales $400,000 (units 5,000), variable costs $247,000, and fixed costs $98,000. Management is considering the following independent courses of action to increase net income.

1. Increase selling price by 10% with no change in total variable costs or units sold.

2. Reduce variable costs to 59% of sales.

Compute the net income to be earned under each alternative.

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 option