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Blossom Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed
Blossom Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 81,600 units of product: net sales $2,040.000; total costs and expenses $2.279.700; and net loss $239.700. Costs and expenses consisted of the following Total Variable Fixed $1,599,360 $1.071.000 $528,360 Cost of goods sold Selling expenses Administrative expenses 527,340 93,840 433,500 153,000 59,160 93,840 $2,279,700 $1,224,000 $1,055,700 Management is considering the following independent alternatives for 2022 1 2. Increase unit selling price 25% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $204,000 to total salaries of $40,800 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 sales dollars for 2021. Round contribution margin ratio to a decimal places ez 02512 and final answer to decimal places. e. 2.510) Break-even points (b) Compute the break even point in sales dollars under each of the alternative courses of action for 2022. Round contribution margin ratio to 3 decimal places 3.0.251 and final answers to decimal places, s. 2510) Break even point 1. Increase selling price $ 2 Change compensation $ 3 Purchase machinery $ Which course of action do you recommend
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