Werth & Garza Manufacturing's sales slumped badly in 2020 due to so many people purchasing gifts online. The company's income statement showed the following results from selling 500,000 units of product: net sales $2,125,000; total costs and expenses $2,500,000; and net loss $375,000. Costs and expenses consisted of the following:

		Total			Variable			Fixed
Cost of goods sold		$2,000,000			$1,300,000			$700,000
Selling expenses		200,000			50,000			150,000
Administrative expenses		300,000			150,000			150,000
		$2,500,000			$1,500,000			$1,000,000

Management is considering the following alternative for 2020:
	Purchase new automated equipment that will change the proportion between variable and fixed expenses to 45% variable and 55% fixed.

Compute the break-even point in dollars for 2020.

Break-even point in dollars

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Compute the break-even point in dollars under the alternative course of action.

Break-even point in dollars

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