Sunland Company reports the following operating results for the month of February: sales $ 894,000 (units 14,900); variable costs $ 429,120; and fixed costs $ 190,700. Management is considering the following independent courses of action to increase net income.

1.		Increase selling price by 2.3% with no change in total variable costs or units sold.
2.		Reduce variable costs to 44.80% of sales.

(a)

Compute the net income to be earned under each alternative. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125.)

		Alternative #1		Alternative #2
Net Income		$ enter a dollar amount		$ enter a dollar amount

Which course of action will produce the highest net income?

select an alternative Alternative #1Alternative #2 will produce the highest net income.