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I need help with part b Question 1 of 4 10/25 Oriole Inc. had a bad year in 2021. For the first time in its
I need help with part b
Question 1 of 4 10/25 Oriole 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 88,000 units of product: net sales $ 2,200,000; total costs and expenses $ 2,458,500; and net loss $ 258,500. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $1,724,800 $ 1,155,000 $569,800 Selling expenses 568,700 101,200 467,500 Administrative expenses 165.000 63,800 101,200 $ 2,458,500 $ 1.320.000 $ 1.138,500 Management is considering the following independent alternatives for 2022. 1 Increase unit selling price 25% with no change in costs and expenses. 2 Change the compensation of salespersons from fixed annual salaries totaling $ 220,000 to total salaries of $ 44,000 plus a 5% 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 (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 0 decimal places, e.g. 2,510.) Break-even point 2,846,250 (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 $Step by Step Solution
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