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Problem 6-1A Your an wer is partially correct. Try again. Midlands Inc, had a bad year in 2016. For the first time in its history,
Problem 6-1A Your an wer is partially correct. Try again. 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 79,000 units of product: net sales $1,975,000; total costs and expenses $1,997,500, and net loss $22,500. Costs and expen?es consisted of the following. Total Variable Fixed Cost of goods sold Selling expenses Administrative expenses $1,337,500 514,000 146,000 $1,997,500 5840,500 91000 56,000 5987,500 $497,000 423,000 90,000 $1,010,000 1. Increase unit selling price 20% with no change in costs and expenses. 2. Change the compensation of salespersons from fixed annual salaries totaling S 199,000 to total salaries of $43,000 plus a 5% commission on net sales. 3. Purchase newi high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50 (a) Compute the break-evan point in dollars for 2016. (Round contribution margin ratio to 2 decimal places e.g. 0.25 and final ansver to 0 decimal places, o.g. 2,510.) Break-even point 202000 (b) Compute the break-even point in dollars under each of the alternative courses of action for 2017. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.) 1. Increase selling price 2. Change compensation 3. Purchase machinery Alternative 1 T Which course of action do you recommend
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