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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 297,750 109,572 188,178 Administrative expenses 250,110 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. (a) Compute the break-even point in sales dollars for 2022. Break-even point $

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 297,750 109,572 188,178 Administrative expenses 250,110 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. (a) Compute the break-even point in sales dollars for 2022. Break-even point $

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 297,750 109,572 188,178 Administrative expenses 250,110 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. (a) Compute the break-even point in sales dollars for 2022. Break-even point $
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 297,750 109,572 188,178 Administrative expenses 250,110 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. (a) Compute the break-even point in sales dollars for 2022. Break-even point $
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