Problem 19-1A

Denny Manufacturing had a bad year in 2012. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 78,400 units of product: Net sales $1,505,280; total costs and expenses $1,742,900; and net loss $237,620. Costs and expenses consisted of the following.

Return to Blackboard Kimmel, Accounting, 4e CALCULATOR PRINTER VERSION BACK NEXT ASSIGNMENT RESOURCES Problem 19-1A 19 Homework: Cost olume-Profit Analysis: Denny Manufacturing had a bad year in 2012. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,400 units of product: Net sales $1,505,280; total costs and expenses $1,742,900; and net loss $237,620. Costs and expenses consisted of the following dditional Issue Problem 19-1A Tota ariable Cost of goods sold Selling expenses Administrative expenses $1,206,000 413,500 123,400 $1,742,900 $784,900 71,200 53,500 $909,600 Ix $421,100 342,300 Review Scor 69,900 $833,300 Management is considering the following independent alternatives for 2013 1. Increase unit selling price 21% with no change in costs and expenses 2. Change the compensation of salespersons from fixed annual salaries totaling $202,600 to total salaries of $35,900 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 2012. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.) Break-even point s (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 0 decimal places, e.g. 2,510.) reak-even poirn 1. Increase selling price 2. Change compensation 3. Purchase machinery Which course of action do you recommend? Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT ink to Media