Cullumber 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 102,400 units of product: net sales $2,560,000; total costs and expenses $2,860,800; and net loss $300,800. Costs and expenses consisted of the following.

		Total		Variable		Fixed
Cost of goods sold		$2,007,040		$1,344,000		$663,040
Selling expenses		661,760		117,760		544,000
Administrative expenses		192,000		74,240		117,760
		$2,860,800		$1,536,000		$1,324,800

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 $256,000 to total salaries of $51,200 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 in dollars rounded to 0 decimal places

(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