Hello. I am in need of assistance in figuring out the Advantages and Disadvantages of each of these 5 Alternatives listed below for Accounting 2. If possible, evaluate the alternatives based on current market conditions and any impact each alternative may have on the long-range plan. Any help would be greatly appreciated! Attached are the 5 alternatives.

Situation for Analysis: Grayslake Novelty produces and sells a small novelty item through tourist shops in Chicago and other northern Illinois locations. Last year the company sold 198,400 units of one of its products. The income statement for this product for last year is shown below:

Sales	$992,000
Less: Variable Expenses	545,600
Contribution Margin	446,400
Less: Fixed Costs	180,000
Net Operating Income	$266,400

While this product has been profitable, as shown in the above income statement, sales began falling near the end of last year and have continued to decline this year. There is concern that new competitors are beginning to take market share from Grayslake Novelty. As a result of declining market share, Sarah Burroughs, the company president, has asked you to provide some information to assist her in making decisions about the company's strategy for this product. These alternatives should be evaluated individually.

Req A Details Sales A Variable Cost B Contribution Margin C Less: Fixed expenses D Net Income E=C-D Contribution Margin per unit Contribution Margin ratio F=C/A Break Even point in Dollars G=D/F H=D/CM per Break Even point in units unit Margin of Safety l=A-G Margin of Safety ratio J=|/A Degree of Operating Leverage K=C/E Req B (Alt 1) Reduce the current price by 8% Details Sales A Variable Cost B Contribution Margin C Less: Fixed expenses D Net Income E=C-D Contribution Margin per unit Contribution Margin ratio F=C/A Break Even point in Dollars G=D/F H=D/CM per Break Even point in units unit Margin of Safety l=A-G Margin of Safety ratio J=l/A Degree of Operating Leverage K=C/ E Last Year Total 992,000.00 545,600.00 446,400.00 180,000.00 266,400.00 2.25 0.45 400,000.00 80,000.00 592,000.00 0.60 1.68 Last Year Total 912,640.00 545,600.00 367,040.00 180,000.00 187,040.00 2.25 0.40 447,568.00 80,000.00 465,072.00 0.51 1.96 Units 198,400 per unit 5 2.75 2.25 Units 198,400 per unit 4.6 2.75 2.25 Req C {Alt 2) Reduce the current variable cost by 0.20 per unit Details Last Year Total Units 198,400 per unit Sales A 992,000.00 5 Variable Cost B 505,920.00 2.55 Contribution Margin C 486,080.00 2.25 Less: Fixed expenses D 180,000.00 Net Income E=C-D 306,080.00 Contribution Margin per unit 2.25 Contribution Margin ratio F=C/A 0.49 Break Even point in Dollars G=D/F 367,347.00 H=D/CM per Break Even point in units unit 80,000.00 Margin of Safety |=A-G 624,653.00 Margin of Safety ratio J=|/A 0.63 Degree of Operating Leverage K=C/E 1.59 Req D {Alt 3) Reduce the current price by 8% and reduce the variable cost by 0.20 per unit Units 198,400 per unit Details Sales Variable Cost Contribution Margin Less: Fixed expenses Net Income Contribution Margin per unit Contribution Margin ratio Break Even point in Dollars Break Even point in units Margin of Safety Margin of Safety ratio Degree of Operating Leverage A B C D E=C-D F=C/A G=D/F H=D/CM per unit l=A-G J=l/A K=C/E Last Year Total 912,640.00 505,920.00 406,720.00 180,000.00 226,720.00 2.25 0.45 403,902.00 80,000.00 508,738.00 0.56 1.79 4.6 2.55 2.25 Req E {Alt 4) Reduce the variable cost by 0.65 per unit and increase the xed costs by $50,000 Details Sales Variable Cost Contribution Margin Less: Fixed expenses Net Income Contribution Margin per unit Contribution Margin ratio Break Even point in Dollars Break Even point in units Margin of Safety Margin of Safety ratio Degree of Operating Leverage Req F A B C D E=C-D F=C/A G=D/F H=D/CM per unit l=A-G J=l/A K=CIE Last Year Total 992,000.00 416,640.00 575,360.00 230,000.00 345,360.00 2.25 0.58 396,552.00 102,222.00 595,448.00 0.60 1.67 Units 198,400 per unit 5 2.1 2.25 {Alt 5) Sales could be increased by 20% if the company hired an additional salesperson: paid both individuals $40,000 fixed salaries; and a 0.25 commission per unit sold Details Sales Variable Cost Contribution Margin Less: Fixed expenses Net Income Contribution Margin per unit Contribution Margin ratio Break Even point in Dollars Break Even point in units Margin of Safety Margin of Safety ratio Degree of Operating Leverage Recommendation: A B C D E=C-D F=C/A G=D/F H=D/CM per unit l=A-G J=l/A K=C/E Net Income Existing Net Operating income 266,400 Strategy 1 187,040 Strategy 2 306,080 Strategy 3 226,720 Strategy 4 345,360 Last Year Total 1,190,400.00 712,240.00 476,160.00 200,000.00 276,160.00 2.25 0.40 500,000.00 88,889.00 690,400.00 0.58 1.72 Units 198,400 per unit 5 3 2.25