Sandhill Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 96,000 units of product: net sales $2,400,000; total costs and expenses $2,682,000; and net loss $282,000. Costs and expenses consisted of the following.

		Total		Variable		Fixed
Cost of goods sold		$1,881,600		$1,260,000		$621,600
Selling expenses		620,400		110,400		510,000
Administrative expenses		180,000		69,600		110,400
		$2,682,000		$1,440,000		$1,242,000

Management is considering the following independent alternatives for 2022.

1.		Increase unit selling price 25% with no change in costs and expenses.
2.		Change the compensation of salespersons from fixed annual salaries totaling $240,000 to total salaries of $48,000 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 50:50.

(a) Compute the break-even point in sales dollars for 2021. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to 0 decimal places, e.g. 2,510.)

Break-even point

$enter the break-even point in dollars rounded to 0 decimal places

(b) Compute the break-even point in sales dollars under each of the alternative courses of action for 2022. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.)

				Break-even point
1.		Increase selling price		$enter a dollar amount
2.		Change compensation		$enter a dollar amount
3.		Purchase machinery		$enter a dollar amount

Which course of action do you recommend? select an alternative Alternative 1Alternative 2Alternative 3