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(a) Compute the break even point in dollars for 2019 (Round contribution margin ratio to 4 decimal places g 0.2512 and final onwerto O decimal places, eg 2,510) Break even point (b) Compute the break even point in dollars under each of the alternative courses of action for 2020 Round contribution margin ratio 3 decimal places eg 0.251 and final answers to O-decimal places, eg 2.510) 1. 2 3. Increase selling price S Change compensation Purchase machinery $ S Break even point Which course of action do you recommend?

(a) Compute the break even point in dollars for 2019 (Round contribution margin ratio to 4 decimal places g 0.2512 and final onwerto O decimal places, eg 2,510) Break even point (b) Compute the break even point in dollars under each of the alternative courses of action for 2020 Round contribution margin ratio 3 decimal places eg 0.251 and final answers to O-decimal places, eg 2.510) 1. 2 3. Increase selling price S Change compensation Purchase machinery $ S Break even point Which course of action do you recommend?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(a) Compute the break-even point in dollars for 2019. (Round contribution margin nitio to 4 decimal places es 0.2512 and finalwer to O decimal places, eg 2,510) Break-even point (b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places eg. 0.251 and final answers to O decimal places, eg 2.510) 1. $ 2 Increase selling price Change compensation 3. Purchase machinery $ $ $ Break-even point Which course of action do you recommend? eTextbook and Media
Transcribed Image Text:(a) Compute the break-even point in dollars for 2019. (Round contribution margin nitio to 4 decimal places es 0.2512 and finalwer to O decimal places, eg 2,510) Break-even point (b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places eg. 0.251 and final answers to O decimal places, eg 2.510) 1. $ 2 Increase selling price Change compensation 3. Purchase machinery $ $ $ Break-even point Which course of action do you recommend? eTextbook and Media
Current Attempt in Progress Midlands Inc, had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 77.000 units of product net sales $1.540,000: total costs and expenses $1.794.800; and net loss $254,800. Costs and expenses consisted of the following Cost of goods sold Selling expenses Administrative expenses 1 2. Total 3. $1.112.800 529,000 Variable $618,000 92,000 153,000 60,000 $1,794,800 $770,000 Fixed $494,800 437,000 92.000 Management is considering the following independent alternatives for 2020, Increase unit selling price 25% with no change in costs and experises. Change the compensation of salespersons from foed annual salaries totaling $201,000 to total salaries of $36,015 plus a 5% commission on net sales $1,024,800 Purchase new high-tech factory machinery that will change the proportion between variable and foxed cost of goods sold to 50:50. (a) Compute the break-even point in dollars for 2019. (Round contribution margin rutio to 4 decimal places eg. 0.2512 and final answer to O decimal places, eg 2.510) Break-even point $
Transcribed Image Text:Current Attempt in Progress Midlands Inc, had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 77.000 units of product net sales $1.540,000: total costs and expenses $1.794.800; and net loss $254,800. Costs and expenses consisted of the following Cost of goods sold Selling expenses Administrative expenses 1 2. Total 3. $1.112.800 529,000 Variable $618,000 92,000 153,000 60,000 $1,794,800 $770,000 Fixed $494,800 437,000 92.000 Management is considering the following independent alternatives for 2020, Increase unit selling price 25% with no change in costs and experises. Change the compensation of salespersons from foed annual salaries totaling $201,000 to total salaries of $36,015 plus a 5% commission on net sales $1,024,800 Purchase new high-tech factory machinery that will change the proportion between variable and foxed cost of goods sold to 50:50. (a) Compute the break-even point in dollars for 2019. (Round contribution margin rutio to 4 decimal places eg. 0.2512 and final answer to O decimal places, eg 2.510) Break-even point $
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