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Crane 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

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Crane 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 65,600 units of product: net sales $1,640,000; total costs and expenses $1,832,700; and net loss $192,700. Costs and expenses consisted of the following. Total Variable Fixed $1,285,760 $861,000 Cost of goods sold Selling expenses $424,760 423,940 75,440 348,500 Administrative expenses 123.000 47.560 75,440 $1.832,700 $984,000 $848,700 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 $164,000 to total salaries of $32,800 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 4 decimal places eg. 0.2512 and final answer to 0 decimal places, eg. 2,510.) Break-even point $ (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 e.g. 0.251 and final answers to O 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

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