Blossom Corp.$\text{'}$s sales slumped badly in $2027.$ For the first time in its history, it operated at a loss. The company's income statement

showed the following results from selling $500,500$ units of product: sales $$2,502,500,$ total costs and expenses $$2,615,550,$ and net

loss $$113,050.$ Costs and expenses consisted of the following amounts.

Management is considering the following independent alternatives for $2028.$

Increase the unit selling price $20\%$ with no change in total costs, total expenses, and sales volume.

Change the compensation of sales personnel from fixed annual salaries totaling $$150,150$ to total salaries of $$60,060$ plus

a $6\%$ commission on sales. All other total costs, total expenses, and total sales remain unchanged.

$($a$)$

Your answer is correct.

Compute the break$-$even point in sales dollars for $2027.$

Break$-$even point $

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$($b$)$

Compute the contribution margin ratio under each of the alternative courses of action.

Contribution margin ratio for alternative $1$

Contribution margin ratio for alternative $2$

$\%$

Compute the break$-$even point in sales dollars under each of the alternative courses of action.

Break$-$even point for alternative $1$$

Break$-$even point for alternative $2$$

Which course of action do you recommend?