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Olgivie Company had a bad year in 2016. For the first time in its history, it operated at a loss. The company's income statement showed
Olgivie Company 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 60,000 units of product: sales SI, 800,000: total costs and expenses exist2, 010,000: and net loss exist210,000. Costs and expenses consisted of the amounts shown below. Management is considering the following independent alternatives for 2017. 1. Increase unit selling price 25% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling exist200,000 to total salaries of exist20,000 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 dollars for 2016. (b) Compute the break-even point in dollars under each of the alternative courses of action. (Round all ratios to nearest full percent.) Which course of action do you recommend
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