Pharoah Corp's sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 525,500 units of product: sales $2,627,500, total costs and expenses $2,715,125, and net loss $87,625. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,231,665 $1,802,465 $429.200 Selling expenses 262,750 96,692 166,058 Administrative expenses 220,710 71,468 149,242 $2,715,125 $1,970,625 $744,500 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 25% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $157,650 to total salaries of $63,060 plus a 5% commission on sales. (a) 114 Your answer is partially correct. Compute the contribution margin under each of the alternative courses of action. Contribution margin for alternative 1 40 % Contribution margin for alternative 2 20 % Compute the break-even point in dollars under each of the alternative courses of action. Break-even point for alternative 1 $ 1,861,250 Break-even point for alternative 2 $ 3066375 Which course of action do you recommend? Alternative 1 4