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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

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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 75,000 units of product: net sales $1,500,000; total costs and expenses $1,620,000; and net loss $120,000. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $962,000 $451,000 $511,000 Selling expenses 510,000 91,000 419,000 Administrative expenses 148,000 58,000 90,000 $1,620,000 $600,000 $1,020,000 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 $ 205,000 to total salaries of $35,025 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 2. 3 50:50 (a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places eg. 0.25 12 and final answer to O decimal places, e.s. 2.510.) Break-even point $ (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 e.g. 0.251 and final answers to decimal places, eg, 2,510) Break-even point (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 0 decimal places, eg. 2,510.) Break-even point Increase selling price 1. $ 2 Change compensation $ 3. Purchase machinery Which course of action do you recommend

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