Question
Compute break-even point under alternative courses of action. P13.4 (LO 4), E Tanek Corp.'s sales slumped badly in 2022. For the first time in
Compute break-even point under alternative courses of action. P13.4 (LO 4), E Tanek Corp.'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 500,000 units of product: sales $2,500,000, total costs and expenses $2,590,000, and net loss $90,000. Costs and expenses consisted of the following amounts. Fixed Cost of goods sold Total $2,140,000 Variable $1,590,000 $550,000 Selling expenses Administrative expenses 250,000 200,000 92,000 158,000 68,000 132,000 $2,590,000 $1,750,000 $840,000 b. Alternative 1 $2,000,000 Management is considering the following independent alternatives for 2023. 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 $140,000 to total sala- ries of $60,000 plus a 5% commission on sales. Instructions a. Compute the break-even point in dollars for 2022. b. Compute the break-even point in dollars under each of the alternative courses of action. (Round all ratios to nearest full percent.) Which course of action do you recommend? Commut
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