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 79.000 units of product net sales $1.580.000; total costs and expenses $1.968.240: and net loss $388.240. Costs and expenses consisted of the following Total $1,307,600 Variable $796.000 Cost of goods sold Selling expenses Administrative expenses 512,640 94.000 Fixed $511,600 418,640 90,000 $1,020,240 148.000 58,000 $1,968.240 $948,000 1. Management is considering the following independent alternatives for 2020. Increase unit selling price 25% with no change in costs and expenses 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. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50 2 3. (a) Compute the break-even point in dollars for 2019. Round contribution margin ratio to 4 decimal places eg. 0.2512 and final answer to decimal places, eg, 2.510.) Break-even point S (b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places eg. 0.251 and final answers to decimal places, eg. 2.510.) Break-even point 1. Increase selling price S 2. Change compensation $ 3. Purchase machinery $ Which course of action do you recommend? Save for Later Attempts:0 of 5 used Submit