statement showed the following results from selling 63,600 units of product: net sales $1,908,000; total costs and expenses $2,130,600; and net loss $222,600. Costs and expenses consisted of the amounts shown below: Cost of goods sold Selling expenses Administrative expenses Total $1,431,000 508,800 190,800 $2,130,600 Variable Fixed $985,800 $445,200 132,500 376,300 121,900 68,900 $1,240,200 Management is considering the following independent alternatives for 2023: $890,400 1. Increase the unit selling price by 25% with no change in costs, expenses, or sales volume. 2. Change the compensation of salespersons from fixed annual salaries totalling $212,000 to total salaries of $21,200 plus a 10% commission on net sales. 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. Calculate the break-even point in dollars for 2022.
statement showed the following results from selling 63,600 units of product: net sales $1,908,000; total costs and expenses $2,130,600; and net loss $222,600. Costs and expenses consisted of the amounts shown below: Cost of goods sold Selling expenses Administrative expenses Total $1,431,000 508,800 190,800 $2,130,600 Variable Fixed $985,800 $445,200 132,500 376,300 121,900 68,900 $1,240,200 Management is considering the following independent alternatives for 2023: $890,400 1. Increase the unit selling price by 25% with no change in costs, expenses, or sales volume. 2. Change the compensation of salespersons from fixed annual salaries totalling $212,000 to total salaries of $21,200 plus a 10% commission on net sales. 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. Calculate the break-even point in dollars for 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer complete question, Please provide answer in text (Without image)
Transcribed Image Text:Cullumber Manufacturing'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 63,600 units of product: net sales $1,908,000; total costs and expenses
$2,130,600; and net loss $222,600. Costs and expenses consisted of the amounts shown below:
Cost of goods sold
Selling expenses
Administrative expenses
Total
$1,431,000
508,800
190,800
$2,130,600
Break-even point
Variable
$985,800
$
132,500
121,900
Management is considering the following independent alternatives for 2023:
$1,240,200
1. Increase the unit selling price by 25% with no change in costs, expenses, or sales volume.
2. Change the compensation of salespersons from fixed annual salaries totalling $212,000 to total salaries of $21,200 plus a 10%
commission on net sales.
Calculate the break-even point in dollars for 2022.
3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to
50:50.
Fixed
$445,200
376,300
68,900
$890,400
2544000
1
Break-even point if unit selling price increases by 25%
Break-even point if there is a change in compensation
Calculate the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to 0
decimal places, e.g. 15% and final answers to O decimal places, e.g. 5,275.)
Break-even point if there is a purchase of new high-tech factory machinery
$
$
1
$
1
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