Klinken Corporation’s contribution margin ratio on the sale of its most popular product is 42%. The product is priced at $80, annual fixed expenses are $800,000. Management is evaluating two options:...

Klinken Corporation’s contribution margin ratio on the sale of its most popular product is 42%. The product is priced at $80, annual fixed expenses are $800,000. Management is evaluating two options: (1) lowering variable costs by 10% and (2) reducing fixed expenses by 10%.

Required:

Calculate the current level of break-even sales in dollars, as well as the break-even sales for the two options.