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Problem 22-04A (Video) Ivanhoe Corp.'s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income
Problem 22-04A (Video) Ivanhoe 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 540,500 units of product: sales $2,702,500, total costs and expenses $2,802,600, and net loss $100,100. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,305,340 270,250 227,010 $2,802,600 Variable $1,772,840 99,452 73,508 $1,945,800 Fixed $532,500 170,798 153,502 $856,800 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 20% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $162,150 to total salaries of $64,860 plus a 4% commission on sales. Compute the break-even point in dollars for 2020. Break-even point LINK TO TEXT 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 alternative 1 $ Break-even point for alternative 2 $ Which course of action do you recommend? Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT VIDEO: SIMILAR
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