showed the following results from selling 88,000 units of product net sales $2.200.000, total 264853nd exper $2,458.500 and net loss $258.500 Costs and expenses consisted of the following Cost of goods sold Selling expenses Administrative expenses 1 2 Management is considering the following independent alternatives for 2022 Increase unit selling price 25% with no change in costs and expenses Change the compensation of salespersons from thed annual salaries totaling $220.000 to total salaries of $44.000 plus a 5% commission on net sales Total $1,724,800 568.700 165,000 $2.458.500 1 Purchase new high-tech factory machinery that will change the proportion between variable and fed cost of goods sold to 50:50 1 4) Compute the break-even point in sales dollars for 2021 (Round contribution margin ratio to 4 decimal places eg. 0.2512 and final answer te 0 decimal places, eg. 2.510) Break-even point S 2 Variable $1,155,000 101.200 63.800 $1.320.000 Compute the treak-even point in sales dollars under each of the alternative courses of action for 2022 (Round contribution margin ratio to 3 decimal places eg. 0.251 and not answers to O decimal places, ea 2,510.1 3 crease selling price 1 Change compensation 5 Purchase machinery Fixed $569,800 467.500 101.200 $1,138,500 5 Break-even point Which course of action do you recommend!
showed the following results from selling 88,000 units of product net sales $2.200.000, total 264853nd exper $2,458.500 and net loss $258.500 Costs and expenses consisted of the following Cost of goods sold Selling expenses Administrative expenses 1 2 Management is considering the following independent alternatives for 2022 Increase unit selling price 25% with no change in costs and expenses Change the compensation of salespersons from thed annual salaries totaling $220.000 to total salaries of $44.000 plus a 5% commission on net sales Total $1,724,800 568.700 165,000 $2.458.500 1 Purchase new high-tech factory machinery that will change the proportion between variable and fed cost of goods sold to 50:50 1 4) Compute the break-even point in sales dollars for 2021 (Round contribution margin ratio to 4 decimal places eg. 0.2512 and final answer te 0 decimal places, eg. 2.510) Break-even point S 2 Variable $1,155,000 101.200 63.800 $1.320.000 Compute the treak-even point in sales dollars under each of the alternative courses of action for 2022 (Round contribution margin ratio to 3 decimal places eg. 0.251 and not answers to O decimal places, ea 2,510.1 3 crease selling price 1 Change compensation 5 Purchase machinery Fixed $569,800 467.500 101.200 $1,138,500 5 Break-even point Which course of action do you recommend!
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:showed the following results from selling 88.000 units of product net sales $2.200,000; total costs and expenses
$2.458.500 and net loss $258.500. Costs and expenses consisted of the following
Cost of goods sold
Selling expenses
Administrative expenses
1
Management is considering the following independent alternatives for 2022
Increase unit selling price 25% with no change in costs and expenses.
Change the compensation of salespersons from fxed annual salaries totaling $220.000 to total salaries of
$44.000 plus a 5% commission on net sales
2
3
Total
Variable
$1,724.800
$1,155,000
568.700
101.200
165,000
63,800
$2.458.500 $1.320.000
(4) Compute the break-even point in sales dollars for 2021 (Round contribution margin ratio to 4 decimal
places eg. 0.2512 and Anal answer to 0 decimal places, eg 2.510)
Break-even points
1
Purchase new high-tech factory machinery that will change the proportion between variable and fed cost of
goods sold to 50:50
Compute the break-even point in sales dollars under each of the alternative courses of action for 2022 (Round
contribution margin ratio te 3 decimal places eg. 0.251 and not answers to 0 decimal places, ea
2.5101
increase selling price 1
Change compensation $
3 Purchase machinery. S
2
Fixed
1569.000
467.500
101.200
$1,138,500
Break-even point
Which course of action do you recommend!
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