BrambleInc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling80,000units of product: net sales $1,600,000; total costs and expenses $1,815,200; and net loss $215,200. Costs and expenses consisted of the following.

Total

Variable

Fixed

Cost of goods sold$1,156,000$650,000$506,000Selling expenses512,20093,000419,200Administrative expenses147,00057,00090,000$1,815,200$800,000$1,015,200

Management is considering the following independent alternatives for 2020.

1.Increase unit selling price25% with no change in costs and expenses.2.Change the compensation of salespersons from fixed annual salaries totaling $199,000to total salaries of $45,010plus a 5% commission on net sales.3.Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.

(a)Compute the break-even point in dollars for 2019.(Round contribution margin ratio to 4 decimal places 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 for 2019 rounded to 0 decimal places

(b)Compute the break-even point in dollars under each of the alternative courses of action for 2020.(Round contribution margin ratio to 3 decimal places e.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 the recommended alternative

Alternative 1

Alternative 2

Alternative 3