Milner Manufacturing had a bad year in 2010. For the first time in its history it operated at a loss. The company's income statement showed the following results from selling 60,000 units of product: Net sales \(\$ 1,500,000\); total costs and expenses \(\$ 1,660,000\); and net loss \(\$ 160,000\). Costs and expenses consisted of the following.

Management is considering the following independent alternatives for 2011.
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 \(\$ 200,000\) to total salaries of \(\$ 30,000\) plus a \(6 \%\) commission on net sales.

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Total Variable Fixed Cost of goods sold $1,200,000 $780,000 $420,000 Selling expenses 340,000 65,000 275,000 Administrative expenses 120,000 55,000 65,000 $1,660,000 $900,000 $760,000