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Sheridan Inc. had a bad year in 2 0 2 1 . For the first time in its history, it operated at a loss. The

Sheridan Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the
following results from selling 73,600 units of product: net sales $1,840,000; total costs and expenses $2,056,200; and net loss
$216,200. Costs and expenses consisted of the following.
Management is considering the following independent alternatives for 2022.
Increase unit selling price 25% with no change in costs and expenses.
Change the compensation of salespersons from fixed annual salaries totaling $184,000 to total salaries of $36,800 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
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 $
(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
Increase selling price $
Change compensation $
Purchase machinery $
Which course of action do you recommend?
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