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 $
Chapter1: Financial Statements And Business Decisions
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
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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