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please specify the process step by step 4. Werth&Garza Manufacturing's sales slumped badly in 2018 due to so many people purchasing gifts online. The company's
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4. Werth&Garza Manufacturing's sales slumped badly in 2018 due to so many people purchasing gifts online. The company's income statement showed the following results from selling 500,000 units of product: net sales $2,125,000; total costs and expenses $2,500,000; and net loss $375,000. Costs and expenses consisted of the following: Cost of goods sold Selling expenses Administrative expenses Total $2,000,000 200,000 300,000 $2.500.000 Variable $1,300,000 50,000 150,000 $1.500,000 Fixed $700,000 150,000 150,000 $1.000.000 Management is considering the following alternative for 2018: Purchase new automated equipment that will change the proportion between variable and fixed expenses to 45% variable and 55% fixed. Instructions a) Compute the break-even point in dollars for 2018. b) Compute the break-even point in dollars under the alternative course of action. 4. Werth & Garza Manufacturing's sales slumped badly in 2018 due to so many people purchasing gifts online. The company's income statement showed the following results from selling 500,000 units of product: net sales $2,125,000; total costs and expenses $2,500,000; and net loss $375,000. Costs and expenses consisted of the following: Total $2,000,000 Variable $1,300.000 50,000 150,000 $1,500,000 Fixed $700,000 150,000 150,000 $1000,000 Cost of goods sold Selling expenses Administrative expenses 200.000 300,000 $2,500,000 Management is considering the following alternative for 2018: MANAGERIAL ACCOUNTING 2 Purchase new automated equipment that will change the proportion between variable and fixed expenses to 45% variable and 55% fxed Instructions a) Compute the break-even point in dollars for 2018 b) Compute the break-even point in dollars under the altenative course of action
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