Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Accounting homework, I have part a) but please help me with part b) Bonita Inc. had a bad year in 2019. For the first time

Accounting homework, I have part a) but please help me with part b) image text in transcribed
image text in transcribed
Bonita Inc. had a bad year in 2019. For the first time in its history. it operated at a loss. The company's income statement showed the following results from selling 77,000 units of product: net sales $1,540,000; total costs and expenses $1,636,000; and net loss $96,000. Costs and expenses consisted of the following. Total Variable Fixed $466,000 $496,800 Cost of goods sold Selling expenses Administrative expenses 94,000 430,200 $962,800 524,200 149.000 $1,636,000 56,000 $616,000 93,000 $1,020,000 Management is considering the following independent alternatives for 2020. 1. 2. Increase unit selling price 25% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $197,000 to total salaries of $40,005 plus a 5% commission on net sales. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50 3. (a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to 0 decimal places, e.g. 2,510.) 1700000 Break-even point (b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.) Break-even point 1 Increase selling price $ 2. Change compensation $ 3. Purchase machinery $ Which course of action do you recommend

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Why CISOs Fail Security Audit And Leadership Series

Authors: Barak Engel

2nd Edition

1032299258, 978-1032299259

More Books

Students also viewed these Accounting questions

Question

8. Explain the relationship between communication and context.

Answered: 1 week ago