Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 80,000 units of product: net sales $2,000,000; total costs and expenses $2,235,000; and net loss $235,000. Costs and expenses consisted of the following.

Compute break-even point under alternative courses of action.

Cost of goods sold Selling expenses Administrative expenses

Total Variable

$1,568,000 $1,050,000 517,000 92,000 150,000 58,000

$

Fixed

518,000 425,000 92,000

$2,235,000 $1,200,000 Management is considering the following independent alternatives for 2020.

$1,035,000

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 $40,000 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