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Sunland Corp.'s sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed the
Sunland Corp.'s sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 575,500 units of product: sales $2,877,500, total costs and expenses $2,973,625, and net loss $96,125. Costs and expenses consisted of the following amounts. Management is considering the following independent alternatives for 2023. 1. Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume. 2. Change the compensation of sales personnel from fixed annual salaries totaling $172,650 to total salaries of $69,060 plus a 5% commission on sales. All other total costs, total expenses, and total sales remain unchanged. Compute the break-even point in sales dollars for 2022. Break-even point $ eTextbook and Media 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 sales dollars under each of the alternative courses of action. Break-even point for alternative 1 Break-even point for alternative 2 Which course of action do you recommend
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