Crane Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 65,600 units of product: net sales $1,640,000; total costs and expenses $1,832,700; and net loss $192,700. Costs and expenses consisted of the following.

		Total		Variable		Fixed
Cost of goods sold		$1,285,760		$861,000		$424,760
Selling expenses		423,940		75,440		348,500
Administrative expenses		123,000		47,560		75,440
		$1,832,700		$984,000		$848,700

Management is considering the following independent alternatives for 2022.

1.		Increase unit selling price 25% with no change in costs and expenses.
2.		Change the compensation of salespersons from fixed annual salaries totaling $164,000 to total salaries of $32,800 plus 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 sales dollars for 2021. (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

(b) Compute the break-even point in sales dollars under each of the alternative courses of action for 2022. (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 an alternative Alternative 1Alternative 2Alternative 3