Midlands Inc. had a bad year in 2019. For the first time in itshistory, it operated at a loss. The company’s income statementshowed the following results from selling 76,000 units of product:net sales $1,520,000; total costs and expenses $1,780,000; and netloss $260,000. Costs and expenses consisted of thefollowing.

		Total		Variable		Fixed
Cost of goods sold		$1,115,600		$611,000		$504,600
Selling expenses		515,400		93,000		422,400
Administrative expenses		149,000		56,000		93,000
		$1,780,000		$760,000		$1,020,000

Management is considering the following independent alternativesfor 2020.

1.		Increase unit selling price 25% with no change in costs andexpenses.
2.		Change the compensation of salespersons from fixed annualsalaries totaling $199,000 to total salaries of $35,980 plus a 5%commission on net sales.
3.		Purchase new high-tech factory machinery that will change theproportion between variable and fixed cost of goods sold to50:50.

(a) Compute the break-even point in dollars for2019. (Round contribution margin ratio to 4 decimalplaces e.g. 0.2512 and final answer to 0 decimal places, e.g.2,510.)

Break-even point

$Enter the break-even point in dollars rounded to 0 decimalplaces

(b) Compute the break-even point in dollars undereach of the alternative courses of action for 2020.(Round contribution margin ratio to 3 decimal placese.g. 0.251 and final answers to 0 decimal places, e.g.2,510.)

				Break-even point
1.		Increase selling price		$Enter a dollar amount
2.		Change compensation		$Enter a dollar amount
3.		Purchase machinery		$Enter a dollar amount

Which course of action do you recommend? Select anoption                                                       Alternative 1Alternative 2Alternative 3