The following numbers were obtained from the income statement of a pasta sauce manufacturer

Net Sales $ 95,000,000

COGS $ 75,000,000

Fixed costs and expenses $ 6,500,000

Other Variable costs and expenses $ 950,000

Semi-fixed costs ( fixed; variable) $ 1,100,000

The companys management has been notified that tomatoes prices are expected to increase, resulting in an increase of COGS by 5%.

As an alternative to purchasing the tomato variety they usually purchase, they can purchase lower quality tomatoes, at a lower price. This will maintain COGS at $75,000,000; however, the resulting product lower quality must be sold at a lower price, resulting in net sales 5% lower than the initial level.

What is the new break-even point?

What are the profits or losses?