Oriole Corp.s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 540,500 units of product: sales $ 2,702,500, total costs and expenses $ 2,803,440, and net loss $ 100,940. Costs and expenses consisted of the amounts shown below.

		Total		Variable		Fixed
Cost of goods sold		$ 2,306,180		$ 1,772,840		$ 533,340
Selling expenses		270,250		99,452		170,798
Administrative expenses		227,010		73,508		153,502
		$ 2,803,440		$ 1,945,800		$ 857,640

Management is considering the following independent alternatives for 2021.

1.

Increase unit selling price 20% with no change in costs, expenses, and sales volume.

2.

Change the compensation of salespersons from fixed annual salaries totaling $ 162,150 to total salaries of $ 64,860 plus a 4% commission on sales.

Compute the contribution margin under each of the alternative courses of action.

Contribution margin for alternative 1		%
Contribution margin for alternative 2		%

Compute the break-even point in dollars under each of the alternative courses of action.

Break-even point for alternative 1		$
Break-even point for alternative 2		$