Pharoah Corp'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 595,500 units of product: sales $2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts. Total Variable Fixed Cost of goods sold $2,528,890 $2,042.565 $486,325 Selling expenses Administrative expenses 297,750 250.110 109.572 188,178 80,988 169.122 $3,076,750 $2,233,125 $843,625 Management is considering the following independent alternatives for 2023. 1. Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume 2. Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total sales remain unchanged. く Your answer is correct. Compute the break-even point in sales dollars for 2022. Break-even point $ 3374500 Compute the contribution margin ratio under each of the alternative courses of action. Contribution margin ratio for alternative 1 Contribution margin ratio for alternative 2 % ୪୧ de % Compute the break-even point in sales dollars under each of the alternative courses of action. Break-even point for alternative 1 +A
Pharoah Corp'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 595,500 units of product: sales $2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts. Total Variable Fixed Cost of goods sold $2,528,890 $2,042.565 $486,325 Selling expenses Administrative expenses 297,750 250.110 109.572 188,178 80,988 169.122 $3,076,750 $2,233,125 $843,625 Management is considering the following independent alternatives for 2023. 1. Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume 2. Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total sales remain unchanged. く Your answer is correct. Compute the break-even point in sales dollars for 2022. Break-even point $ 3374500 Compute the contribution margin ratio under each of the alternative courses of action. Contribution margin ratio for alternative 1 Contribution margin ratio for alternative 2 % ୪୧ de % Compute the break-even point in sales dollars under each of the alternative courses of action. Break-even point for alternative 1 +A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Pharoah Corp'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 595,500 units of product: sales
$2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts.
Total
Variable
Fixed
Cost of goods sold
$2,528,890
$2,042.565
$486,325
Selling expenses
Administrative expenses
297,750
250.110
109.572
188,178
80,988
169.122
$3,076,750
$2,233,125 $843,625
Management is considering the following independent alternatives for 2023.
1.
Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume
2.
Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total
sales remain unchanged.
く
Your answer is correct.
Compute the break-even point in sales dollars for 2022.
Break-even point
$
3374500
Compute the contribution margin ratio under each of the alternative courses of action.
Contribution margin ratio for alternative 1
Contribution margin ratio for alternative 2
%
୪୧
de
%
Compute the break-even point in sales dollars under each of the alternative courses of action.
Break-even point for alternative 1
+A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F11d9b74d-fabc-4061-9fac-570964bae036%2F7668d813-678b-4942-ab22-ff250adb8dcd%2Fcaxa9z_processed.png&w=3840&q=75)
Transcribed Image Text:Pharoah Corp'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 595,500 units of product: sales
$2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts.
Total
Variable
Fixed
Cost of goods sold
$2,528,890
$2,042.565
$486,325
Selling expenses
Administrative expenses
297,750
250.110
109.572
188,178
80,988
169.122
$3,076,750
$2,233,125 $843,625
Management is considering the following independent alternatives for 2023.
1.
Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume
2.
Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total
sales remain unchanged.
く
Your answer is correct.
Compute the break-even point in sales dollars for 2022.
Break-even point
$
3374500
Compute the contribution margin ratio under each of the alternative courses of action.
Contribution margin ratio for alternative 1
Contribution margin ratio for alternative 2
%
୪୧
de
%
Compute the break-even point in sales dollars under each of the alternative courses of action.
Break-even point for alternative 1
+A
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