Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 725,000 units of product to finished goods. At the end of November, the work in process inventory consists of 182,000 units that are 70% complete with respect to conversion. Beginning inventory had $412,685 of direct materials and $63,930 of conversion cost. The direct material cost added in November is $2,761,815, and the conversion cost added is $1,214,670. Beginning work in process consisted of 78,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 78,000 were from beginning work in process and 647,000 units were started and completed during the period.

Midlands inc. had a bad year in 2016. for the first time in its history, it operated at a loss. the company’s income statement showed the following results from selling 79,000 units of product: net sales $1,580,000; total costs and expenses $1,968,000; and net loss $388,000. costs and expenses consisted of the following. total variable fixed cost of goods sold $1,300,000 $796,000 $504,000 selling expenses 520,000 94,000 426,000 administrative expenses 148,000 58,000 90,000 $1,968,000 $948,000 $1,020,000 management is considering the following independent alternatives for 2017. 1. increase unit selling price 25% with no change in costs and expenses. 2. change the compensation of salespersons from fixed annual salaries totaling $200,000 to total salaries of $43,000 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. (a) compute the break-even point in dollars for 2016. (round contribution margin ratio to 2 decimal places e.g. 0.25 and final answer to 0 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 2017. (round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.) 1. increase selling price 2. change compensation 3. purchase machinery which course of action do you recommend?