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Cullumber 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
Cullumber 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 555,500 units of product: sales $2,777,500, total costs and expenses $2,869,375, and net loss $91,875. Costs and expenses consisted of the following amounts. Total Variable Fixed Cost of goods sold $2,358,315 $1,905,365 $452,950 Selling expenses 277,750 102,212 175,538 Administrative expenses 233,310 75,548 157,762 $2,869,375 $2,083,125 $786,250 Management is considering the following independent alternatives for 2023. 1. Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume. 2. Change the compensation of sales personnel from fixed annual salaries totaling $166,650 to total salaries of $66,660 plus a 5% commission on sales. All other total costs, total expenses, and total sales remain unchanged. (a) V Your answer is correct. Compute the break-even point in sales dollars for 2022. Break-even point $ 3,145,000Compute the contribution margin ratio under each of the alternative courses of action. Contribution margin ratio for alternative 1 ' 96 Contribution margin ratio for alternative 2 ' '96 Compute the breakeven point in sales dollars. under each of the alternative courses of action. Break-even point for alternative 1 $ l Breakeven point for alternative 2 $ l Which course of action [lo vou recommend
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