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Problem 18-4A a-b (video) Pharoah Corp.'s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's
Problem 18-4A a-b (video) Pharoah Corp.'s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 595,500 units of product: sales $2.977,500, total costs and expenses $3,076,750, and net loss $99.750. Costs and expenses consisted at the amounts shown below. Carl of gets sulci Selling expenses Administrative expenses Total $2,528,890 297,750 250,110 $3,076,750 Variable $2,042,555 109,572 80,988 57,223,125 Fixed $426,325 188,178 169,122 $84.3,625 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 25%with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons frarni fixed annual salaries totaling $179,650 to latalalaries of $71,460 plus a 5% commission on sales. Compute the break even point in dollars for 2020. Break-even point Compute the contribution margin under each of the alternative courses of action Contribution margin for alternative 1 Contribution margin for alternative 2 Compute the break even point in dollars under each of the alternative courses of action. Break-even point for altenative 1 Break even point for altemative 2 Which course of action do you recommend? Click if you would like to Show Work for this question: Orien Show Work
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