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 78,000 units of product: net sales $1,560,000; total costs and expenses $1.935,960; and net loss $375,960. Costs and expenses consisted of the following. Cost of goods sold Total $1,258,000 Variable $785,000 Fixed $473,000 Selling expenses 524.960 93,000 431,960 Administrative expenses 153,000 58,000 95,000 $1.935,960 $936,000 $999.960 Management is considering the following independent alternatives for 2020. 1. Increase unit selling price 25% with no change in costs and expenses. 2. 3. Change the compensation of salespersons from fixed annual salaries totaling $199,000 to total salaries of $44,990 plus a 5% commission on net sales. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.