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Midlands Inc. had a bad year in 2016. For the first time in its history, it operated at a loss. The company's income statement showed
Midlands Inc. had a bad year in 2016. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,000 units of product: net sales dollar2, 340,000; total costs and expenses S2, 185,000; and net loss dollar-155,000. Costs and expenses consisted of the following. Management is considering the following independent alternatives for 2017. Increase unit selling price 20Percentage with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling dollar202,000 to total salaries of dollar 40,000 plus a 5Percentage 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. Compute the break-even point in dollars for 2017. (Round contribution margin ratio to 2 decimal places e.g. 0.25 and final answer to O decimal places, e.g. 2, 510.) Break-even point Compute the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to O decimal places, e.g. 2, 510.) Increase selling price J 17400005 Change compensation 1560000 Purchase machinery 1510000
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