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Pharoah Corp.$\text{'}$s sales slumped badly in $2022.$ For the first time in its history, it operated at a loss. The company's income statement

showed the following results from selling $525,500$ units of product: sales $$2,627,500,$ total costs and expenses $$2,715,125,$ and net

loss $$87,625.$ Costs and expenses consisted of the following amounts.

Management is considering the following independent alternatives for $2023.$

Increase unit selling price $20\%$ with no change in costs, expenses, and sales volume.

Change the compensation of salespersons from fixed annual salaries totaling $$157,650$ to total salaries of $$63,060$ plus a $5\%$

commission on sales.

$($a$)$

Your answer is correct.

Compute the break$-$even point in dollars for $2022.$

Break$-$even point $

Attempts: $1$ of $3$ used

$($b$)$

Compute the contribution margin ratio under each of the alternative courses of action. $($Round answers to $2$ decimal places, e$.$g

$21\mathrm{.}22.)$

Contribution margin ratio for alternative $1$

$\%$

Contribution margin ratio 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?