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 selling79,000units of product: net sales $1,580,000; total costs and expenses $1,968,000; and net loss $388,000. Costs and expenses consisted of the following.

Midlands Inc. had a bad vear in 2016. For the rst time in its historv, it operated at a loss. The company's income statement showed the following results from selling 79,000 units of product: net sales $1,580,000: total costs and expenses $1,968,000; and net loss $388,000. Costs and expenses consisted of the following. Total Variable leed Cost of goods sold $1,300,000 $796,000 $504,000 Selling expenses 520,000 94,000 426,000 Administrative expenses 148,000 58,000 90,000 $1,968,000 $948,000 $1,020,000 Management is considering the following independent alternatives for 201?. 1. Increase unit selling price 25% with no change in costs and expenses. 2. Change the compensation of salespersons from xed annual salaries totaling $200,000 to total salaries of $43,000 plus a 5% commission on net sales. 3. Purchase new high-tech factory machinerv that will change the proportion between variable and xed cost of goods sold to 50:50. (a) Compute the break-even point in dollars for 2017. (Round contribution margin ratlo to 2 decimal places 2.9. 0.25 and final answer to 0 decimal places, e.g. 2,510.) area k-even point $ (b) Compute the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratlo to 4 decimal piaces 2.9. 0.2512 and final answers to a decimal places, e.g. 2,510.) Break-even POII'It 1. Increase selling price $ 2. Change compensation $ 3. Purchase machinery $ Which course of action do you recommend