Birchfields management is looking at longer term solutions to improve net income. One of the options they have reviewed will increase fixed expenses by $24,900 while reducing variable expenses by $2.00 per unit. Management feels that with these changes the price of the product could be reduced by $1.00 per unit. The decrease in price will then result in an increase in unit sales of 5%. Compute the net income to be earned under this alternative. Do you recommend this option? Why or why not? (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125.)

Net Income

$

This option is recommendednot recommended as it increasesdecreases net income.