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will upvote Sandhill Corp.'s sales slumped badly in 2020 . For the first time in its history, it operated at a loss. The company's income
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Sandhill 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 560,500 units of product: sales $2,802,500, total costs and expenses $2,907,360, and net loss $104,860. Costs and expenses consisted of the amounts shown below. Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 20% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $168,150 to total salaries of $67,260 plus a 4% commission on sales. Compute the break-even point in dollars for 2020. Break-even point $ 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 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 Step by Step Solution
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