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Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 75,000 units of product: net sales $ 1,500,000; total costs and expenses $ 1,900,000; and net loss $400,000. Costs and expenses consisted of the following. Total Variable Fixed 1,240,000 $755,000 $485,000 515,000 90,000 425,000 Administrative expenses 145,000 55,000 90,000 $1,900,000 $900,000 $1,000,000 Cost of goods sold Selling expenses Management is considering the following independent alternatives for 2020. Increase unit selling price 20% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $195,000 to total salaries of $35,000 plus a 5% commission on net sales. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50 1. 2. 3.(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to O decimal places, e.g. 2,510.) Break-even point $ (b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to O decimal places, e.g. 2,510.) Break-even point 1. Increase selling price 2. Change compensation$ 3. Purchase machinery $ Which course of action do you recommend?

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