Paul was a marketing major in college. He believes that sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Sandhills: (1) increase variable selling expenses to $0.59 per unit, (2) lower the selling price per unit by $0.25, and (3) increase fixed selling expenses by $43,000. Paul quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made. Compute the net income under Pauls proposal and the break-even point in dollars. (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to 0 decimal places, e.g. 2,520.)

The condensed income statement for the Sandhill and Paul partnership for 2020 is as follows. Sandhill and Paul Company Income Statement For the Year Ended December 31, 2020 Sales (270,000 units) $1,350,000 Cost of goods sold 864,000 Gross profit 486,000 Operating expenses Selling $315,000 Administrative 175,500 490,500 Net loss $(4,500) A cost behavior analysis indicates that 75% of the cost of goods sold are variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable