Question
Crane 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
Crane 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 $3,024,875, and net loss $97,375. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,486,215 $2,008,265 $477,950 Selling expenses 292,750 107,732 185,018 Administrative expenses 245,910 79,628 166,282 $3,024,875 $2,195,625 $829,250 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 25% with no change in costs, expenses, and sales volume. 2. (a) Change the compensation of salespersons from fixed annual salaries totaling $175,650 to total salaries of $70,260 plus a 5% commission on sales. Compute the break-even point in dollars for 2020. Break-even point $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
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