Delgado Manufacturing's sales slumped badly in 2012. 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 $1.5 million, total costs and expenses $1,890,000, and net loss $390,000. Costs and expenses were as follows:

Management is considering the following independent alternatives for 2013:
1. Increase the unit selling price by 40% with no change in costs and expenses.
2. Change the compensation of salespersons from fixed annual salaries totaling $200,000 to total salaries of $30,000 plus a 4% commission on net sales.
3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.
Instructions
(a) Calculate the break-even point in dollars for 2012.
(b) Calculate the break-even point in dollars under each of the alternative courses of action. (Round to nearest full percent.) Which course of action do you recommend?

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Total Variable Cost of goods sold Selling expenses Administrative expenses $1,350,000 420,000 120,000 $1,890,000 $930,000 65,000 55,000 $1,050,000 Fixed $420,000 355,000 65,000 $840,000