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Carla Vista Corp's sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement
Carla Vista Corp's sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 585,500 units of product: sales $2,927,500, total costs and expenses $3,036,000, and net loss $108,500. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,497,340 $1,920,440 $576,900 Selling expenses 292,750 107,732 185,018 Administrative expenses 245,910 79,628 166,282 $3,036,000 $2,107,800 $928,200 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 20% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $175,650 to total salaries of $70,260 plus a 4% commission on sales. Compute the break-even point in dollars for 2020. Break-even point (b) eTextbook and Media 3315000 - Your answer is partially correct. Compute the contribution margin under each of the alternative courses of action. Contribution margin for alternative 1 23 % Contribution margin for alternative 2 28 % Attempts: 1 of 3 used Compute the contribution margin under each of the alternative courses of action. Contribution margin for alternative 1 23 % Contribution margin for alternative 2 28 28 % Compute the break-even point in dollars under each of the alternative courses of action. Break-even point for alternative 1 $ 40356 Break-even point for alternative 2 $ 3315000 Which course of action do you recommend? Alternative 1:
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