Midlands Inc. had a bad year in 2016. For the first time in itshistory, it operated at a loss. The company’s income statementshowed the following results from selling 78,000 units of product:net sales $1,560,000; total costs and expenses $1,800,000; and netloss $240,000. Costs and expenses consisted of the following.
TOTAL
VARIABLE
FIXED
COST OF GOODS SOLD
1,134,000
633,000
501,000
SELLING EXPENSES
520,000
91,000
429,000
ADMINISTRATIVE EXPENSES
146,000
56,000
90,000
1,800,000
780,000
1,020,000
Management is considering the following independent alternativesfor 2017.
1.
Increase unit selling price 20% with no change in costs andexpenses.
2.
Change the compensation of salespersons from fixed annualsalaries totaling $204,000 to total salaries of $45,000 plus a 5%commission on net sales.
3.
Purchase new high-tech factory machinery that will change theproportion between variable and fixed cost of goods sold to50:50.
(a) Compute the break-even point in dollars for2016. (Round contribution margin ratio to 2 decimalplaces e.g. 0.25 and final answer to 0 decimal places, e.g.2,510.)
break-even point $2,040,000 [MY ANSWER]
Break Even Point
1
Increase Selling price
$
2
Change Compensation
$
3
Purchase Machinery
$
Please show me how you get the solution
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
