Yams Company reports the following operating results for the month of August: sales $365,000(units5,000), variable costs $247,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income.

1.	Increase selling price by11% 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	$
2.	Net Income	$

Which course of action will produce the higher net income?

Yams Company reports the following operating results for the month of August: sales $365,000(units5,000), variable costs $247,000, and fixed costs $99,000. Management is considering the following independent courses of action to increase net income.