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Delgado Manufacturing's sales slumped badly in 2015. For the first time in its history, it operated at a loss. The company's income statement showed the
Delgado Manufacturing's sales slumped badly in 2015. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 60000 units of product: net sales $1.5 million, total costs and expenses $1890000, and net loss $390000. Costs and expenses were as follows: Total Variable Fixed Cost of goods sold $1350000 930000 $420000 Selling expenses 420000 65000 355000 Administrative expenses 120000 55000 65000 $1890000 $1050000 $8400000 Management is considering the following independent alternatives for 2016: 1. Increase the unit selling price by 40% with no change in costs and expenses. 2. Change the compensation of salespersons from fixed annual salaries total ng $200000 to total salaries of $30000 plus a 4% commission on net sales. 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. Prepare a contribution margin format income statement for the current situation and each of the alternatives. Use do not use commas, put negative numbers in ($123456)
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