showed the following results from selling 585,500 units of product: sales $2,927,500, total costs and expenses $3,036,000, and net loss $108,500. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,497,340 292,750 245,910 $3,036,000 1. 2. Variable $1,920,440 107,732 79,628 $2,107,800 Fixed $576,900 185,018 166,282 $928,200 Management is considering the following independent alternatives for 2021. Increase unit selling price 20% with no change in costs, expenses, and sales volume. Change the compensation of salespersons from fixed annual salaries totaling $175,650 to total salaries of $70,260 plus a 4% commission on sales.
showed the following results from selling 585,500 units of product: sales $2,927,500, total costs and expenses $3,036,000, and net loss $108,500. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,497,340 292,750 245,910 $3,036,000 1. 2. Variable $1,920,440 107,732 79,628 $2,107,800 Fixed $576,900 185,018 166,282 $928,200 Management is considering the following independent alternatives for 2021. Increase unit selling price 20% with no change in costs, expenses, and sales volume. Change the compensation of salespersons from fixed annual salaries totaling $175,650 to total salaries of $70,260 plus a 4% commission on sales.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku
![Compute the break-even point in dollars for 2020.
Break-even point $
Compute the contribution margin under each of the alternative courses of action. (Round contribution margin ratio to O decimal
places, e.g. 50 %)
Contribution margin for alternative 1
Contribution margin for alternative 2
Break-even point for alternative 1 $
Compute the break-even point in dollars under each of the alternative courses of action.
Break-even point for alternative 2
$
%
Which course of action do you recommend?
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1d3f9d32-ab4d-4aaf-81f1-7f99b9740404%2F9b16e6ef-c0c0-45ad-b5b4-a3574db7d65c%2Fh6xq9b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Compute the break-even point in dollars for 2020.
Break-even point $
Compute the contribution margin under each of the alternative courses of action. (Round contribution margin ratio to O decimal
places, e.g. 50 %)
Contribution margin for alternative 1
Contribution margin for alternative 2
Break-even point for alternative 1 $
Compute the break-even point in dollars under each of the alternative courses of action.
Break-even point for alternative 2
$
%
Which course of action do you recommend?
%
![Carla Vista Corp's sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement
showed the following results from selling 585,500 units of product: sales $2,927,500, total costs and expenses $3,036,000, and net
loss $108,500. Costs and expenses consisted of the amounts shown below.
Cost of goods sold
Selling expenses
Administrative expenses
Total
$2,497,340
292,750
245,910
$3,036,000
2.
Variable
$1,920,440
Fixed
$576,900
107,732 185,018
79,628 166,282
$2,107,800 $928,200
Management is considering the following independent alternatives for 2021.
1. Increase unit selling price 20% with no change in costs, expenses, and sales volume.
Change the compensation of salespersons from fixed annual salaries totaling $175,650 to total salaries of $70,260 plus a 4%
commission on sales.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1d3f9d32-ab4d-4aaf-81f1-7f99b9740404%2F9b16e6ef-c0c0-45ad-b5b4-a3574db7d65c%2Fsl1e1ya_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Carla Vista Corp's sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement
showed the following results from selling 585,500 units of product: sales $2,927,500, total costs and expenses $3,036,000, and net
loss $108,500. Costs and expenses consisted of the amounts shown below.
Cost of goods sold
Selling expenses
Administrative expenses
Total
$2,497,340
292,750
245,910
$3,036,000
2.
Variable
$1,920,440
Fixed
$576,900
107,732 185,018
79,628 166,282
$2,107,800 $928,200
Management is considering the following independent alternatives for 2021.
1. Increase unit selling price 20% with no change in costs, expenses, and sales volume.
Change the compensation of salespersons from fixed annual salaries totaling $175,650 to total salaries of $70,260 plus a 4%
commission on sales.
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