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 79,000 units of product: net sales $1.975,000; total costs and expenses $1,997,500, and net loss $22,500. Costs and expenses consisted of the following Cost of goods sold Selling expenses Total $1,337,500 514,000 146,000 $1,997,500 Variable $840,500 91.000 56,000 $987,500 Fixed $497,000 423,000 90,000 $1,010,000 Administrative expenses Management is considering the following independent alternatives for 2017 1. Increase unit selling price 20% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $199,000 to total salaries of $43,000 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. 2. (a) Compute the break-even point in dollars for 2017. (Round contribution margin ratio to 2 decimal places es. 0.25 and final answer to decimal places, es 2.510) Break-even point $ pudare 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 2017. (Round contribution margin ratio to 2 decimal places e.g. 0.25 and final answer to 0 decimal places, es 2,510.) Break-even point $ (b) Compute the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to 4 decimal places es. 0.2512 and final answers to O decimal places, e.g. 2,510.) Break-even point 1. Increase selling price $ 2. Change compensation $ 3. Purchase machinery Which course of action do you recommend? Alternative 1 Alternative 2 Alternative 3 e Textbook and Media