Expand Your Critical Thinking 18-02 The condensed income statement for the Sunland and Paul partnership for 2020 is as follows. Sunland and Paul Company Income Statement For the Year Ended December 31, 2020 Sales (280,000 units) Cost of goods sold Gross profit Operating expenses Selling Administrative $1,400,000 896,000 504,000 $340,000 203,000 Net loss 543,000 $(39,000) A cost behavior analysis indicates that 75% of the cost of goods sold are variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable. Your answer is correct. Compute the break-even point in total sales dollars for 2020. (Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 2,520.) Break-even point in dollars 1508333 Your answer is correct. Sunland has proposed a plan to get the partnership "out of the red" and improve its profitability. She feels that the quality of the product could be substantially improved by spending $0.25 more per unit on better raw materials. The selling price per unit could be increased to only $5.25 because of competitive pressures. Sunland estimates that sales volume will increase by 25%. Compute the net income under Sunland's proposal and the break-even point in dollars. (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to 0 decimal places, e.g. 2,520.) Net Income Break-even point LINK TO TEXT Amount 87000 1583750 Your answer is partially correct. Try again. Paul was a marketing major in college. He believes that sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Sunland's: (1) increase variable selling expenses to $0.59 per unit, (2) lower the selling price per unit by $0.25, and (3) increase fixed selling expenses by $43,000. Paul quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made. Compute the net income under Paul's proposal and the break-even point in dollars. (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to decimal places, e.g. 2,520.) Net income Amount 72560 Break-even point 1893537.41