+ HW CH 6 Question 2 of 6 - / 12 View Policies Current Attempt in Progress Pharoah 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 89,600 units of product: net sales $2,240,000; total costs and expenses $2,503,200; and net loss $263,200. Costs and expenses consisted of the following Total Variable Fixed Cost of goods sold $1,756,160 $1.176,000 $580,160 Selling expenses 579,040 103.040 476,000 Administrative expenses 168,000 64,960 103,040 $2,503,200 $1,344,000 $1,159,200 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 $224,000 to total salaries of $44.800 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 e.g. 0.2512 and final answer to O decimal places, e.g. 2,510.) f HW CH 6 Question 2 of 6 - /12 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50 (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 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 eg. 0.251 and final answers to O decimal places, eg. 2,510.) Break-even point 1 Increase selling price $ 2 Change compensation $ 3 Purchase machinery $ Which course of action do you recommend? e Textbook and Media Save for later Attempts: 0 of 3 used Submit