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 $1,560,000; total costs and expenses $1,800,000; and net loss $240,000. Costs and expenses consisted of the following.

TOTALVARIABLEFIXEDCOST OF GOODS SOLD1,134,000633,000501,000SELLING EXPENSES520,00091,000429,000ADMINISTRATIVE EXPENSES146,00056,00090,0001,800,000780,0001,020,000Management is considering the following independent alternatives for 2017.

1.Increase unit selling price 20% with no change in costs and expenses.2.Change the compensation of salespersons from fixed annual salaries totaling $204,000 to total salaries of $45,000 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 dollars for 2016. (Round contribution margin ratio to 2 decimal places e.g. 0.25 and final answer to 0 decimal places, e.g. 2,510.)

break-even point $2,040,000 [MY ANSWER]

Break Even Point1Increase Selling price$2Change Compensation$3Purchase Machinery$Please show me how you get the solution