Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 77,000 units of product: net sales $1,540,000; total costs and expenses $1,636,000; and net loss $96,000. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $962,800 $466,000 $496,800 Selling expenses 524,200 94,000 430,200 Administrative expenses 149,000 56,000 93,000 $1,636,000 $616,000 $1,020,000 Management is considering the following independent alternatives for 2020. 1. Increase unit selling price 25% with no change in costs and expenses. 2 Change the compensation of salespersons from fixed annual salaries totaling $197,000 to total salaries of $40,005 plus a 5% commission on net sales.