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Cullumber 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 520,500 units of product: sales $2,602,500, total costs and expenses $2,698,042, and net loss $95,542. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,219,182 260,250 218,610 $2,698,042 Variable $1,738,470 95,772 70,788 $1,905,030 Fixed $480,712 164,478 147,822 $793,012 Management is considering the following independent alternatives for 2021. 1. 2. Increase unit selling price 22% with no change in costs, expenses, and sales volume. Change the compensation of salespersons from fixed annual salaries totaling $156,150 to total salaries of $62,460 plus a 6% commission on sales. (a) Your answer is correct. Compute the break-even point in dollars for 2020. Break-even point $ 2959000 (b) Compute the contribution margin under each of the alternative courses of action. (Round contribution margin ratio to 0 decimal places, e.g. 50%.) Contribution margin for alternative 1 % Contribution margin for alternative 2 % Compute the break-even point in dollars using the contribution margin ratio 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? eTextbook and Media Save for Later Attempts: 0 of 5 used Submit