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. Total Fixed Variable $1,134,000 $633,000 $501,000 Cost of goods sold Selling expenses 520,000 91,000 429,000 Administrative expenses 146,000 56,000 90,000 $1,800,000 $780,000 $1,020,000 Management is considering the following independent alternatives for 2017. Increase unit selling price 20% with no change in costs and expenses. 1. 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. 2. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods 3. 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, e.g. 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 e.g. 0.25 12 and final answers to 0 decimal places, e.g. 2,510.) Break-even point $ Increase selling price 1. Change compensation $ 2. $ Purchase machinery 3. Which course of action do you recommend? tA