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Need accounting help on 2 questions. Attached the file Fredonia Inc. had a bad year in 2013. For the first time in its history, it

Need accounting help on 2 questions. Attached the file

image text in transcribed Fredonia Inc. had a bad year in 2013. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 76,000 units of product: Net sales $1,444,000; total costs and expenses $1,736,100; and net loss $292,100. Costs and expenses consisted of the following: Total Variable Fixed Cost of goods sold $1,202,800 $779,700 $423,100 Selling expenses 412,200 70,100 342,100 Administrative expenses 121,100 44,100 77,000 $1,736,100 $893,900 $842,200 Management is considering the following independent alternatives for 2014. 1. Increase unit selling price 25% with no change in costs and expenses. 2. Change the compensation of salespersons from fixed annual salaries totaling $196,500 to total salaries of $38,900 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 dollars for 2014. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.) Break-even point = $ (b) 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 0 decimal places, e.g. 2,510.) Break-even point 1. Increase selling price $ 2. Change compensation $ 3. Purchase machinery $ Which course of action do you recommend? Alternative 1, Alternative 2, or Alternative 3

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