Midlands inc had a bad year in 2016. For the first time in its history, it operated at a loss. The Company's income statement showed the following results from selling 78,000 units of product; net sales $1,950,000; total costs and expenses $1,795,000; and net loss $-155,000. Costs and expenses consisted of the following.

Total Variable Fixed

Cost of Goods sold $1,130,000 $633,000 $497,000

Selling Expenses 518,000 90,000 428,000

Administrative expenses 147,000 57,000 90,000

Management is considering the following independent alternatives for 2017.

1. Increase unit selling price 30% with no change in costs and expenses.

2. Change the compensation of salespersons from fixed annual salaries totaling $202,000 to total salaries of $41,000 plus a 5% comminssion 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. computer the break-even point in dollars for 2017.

b. compute the break-even point in dollars under each of the alternative courses of action.

1. Increase selling price $____________________

2. Change compensation $_______________________

3. Purchase machinery $______________________

which course of action do you recommend