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Please help with part B 1 and 3. These answers are wrong. I also tried 1,466,110 for part a and 1,662,824 and those were also
Please help with part B 1 and 3. These answers are wrong. I also tried 1,466,110 for part a and 1,662,824 and those were also wrong.
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 $1,950,000; total costs and expenses $1,795,000; and net loss $-155,000. Costs and expenses consisted of the following. Total Variable Fixed FREu Cost of goods sold Selling expenses Administrative expenses $1,130,000 $633,000 $497,000 518,000 90,000 428,000 0.000 $1,795,000 $780,000 $1,015,000 147,000 57,000 Management is considering the following independent alternatives for 2017 1. Increase unit selling price 30% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $202,000 to total salaries of $41,000 plus a 5% commission on net sales. 2 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 2017. (Round contribution margin ratio to 2 decimal places eg.0.25 and final answer to O decimal places, e.g. 2,510.) Break-even point $ 1691667 (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 O decimal places, e.g. 2,510.) Break-even point 1. Increase selling price 2. Change compensation $ 3. Purchase machinery 1466411 1552727 1705856 Which course of action do you recommend? Alternative1Step by Step Solution
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