Wilson Company reports the following operating results for the month of August: sales $300,000(units 5,000); variable costs $212,200; and fixed costs $69,000.

Management is considering the following independent courses of action to increase net income.

Compute the net income to be earned under each alternative.

1.Increase selling price by 10% with no change in total variable costs or sales volume. ________________

2.Reduce variable costs to51% of sales. ________________

3.Reduce fixed costs by $19,700. ________________

Which course of action will produce the highest net income? Alternative 1? Alternative 2? Alternative 3?