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P6-1B McCure Corporation had a bad year in 2013, operating at a loss for the first tme Compute break-even point in its history. The company's
P6-1B McCure Corporation had a bad year in 2013, operating at a loss for the first tme Compute break-even point in its history. The company's income statement showed the following results from selling under alternative courses of 200,000 units of product: net sales $2,400,000; total costs and expenses $2,472,000; and action. net loss $72,000. Costs and expenses consisted of the following (LO 1, 2), AN Total Variable Fixed Cost of goods sold Selling expenses Administrative expenses $1,486,000 $1,070,000 $416,000 325,000 195,000 $2,472,000 $1,536,000 $936,000 681,000 305,000 356,000 110,000 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 $170,000 to total salaries of $50,000 plus a 6% commission on net sales 3. Purchase new high-tech sactory machinery that will chan ge the proportion between variable and fixed cost of goods sold to 40:60 Instructions (a) Compute the break-even point in doliars for 2014 (b) Compute the break-even point in dollars under each of the alternative courses of (b) 12) S2,720,000 action. Which course of action do you recommend? Round to the nearest dollar
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