Midlands Inc. had a bad year in 2016. For the first time in its history, it operated at a loss. The companys 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.

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 $1,580,000; total costs and expenses $1,968,000; and net loss $388,000. Costs and expenses consisted of the following. Cost of goods sold Selling expenses Administrative expenses $1,300,000 520,000 148,000 $1,968,000 $796,000 94,000 58,000 $948,000 5504,000 426,000 90,000 $1,020,000 Management is considering the following independent alternatives for 2017 1. Increase unit selling price 25% with no change in costs and expenses. 2, change the compensation of salespersons from fixed annual salaries totaling $200,000 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. (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 (b) Compute the break-even point in dollars under each of the alternative courses of action for 2017. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.) 1. Increase selling price 2. Change compensation 3. Purchase machinery Which course of action do you recommend