Question 2 of 6 7.2 / 12 III Cost of goods sold $1,662,080 $1,113,000 $549,080 Selling expenses 548,020 97,520 450,500 Administrative expenses 159,000 61,480 97,520 $2,369,100 $1,272,000 $1,097,100 Management is considering the following independent alternatives for 2022. 1. Increase unit selling price 25% with no change in costs and expenses. 2. Change the compensation of salespersons from fixed annual salaries totaling $212,000 to total salaries of $42,400 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 sales dollars for 2021. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final Question 2 of 6 7.2 / 12 (b) Compute the break-even point in sales dollars under each of the alternative courses of action for 2022. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.) Break-even point 1. Increase selling price $ 2,109,807.69 2. Change compensation $ 2,650,000 3. Purchase machinery $ 747,451.4 Which course of action do you recommend? Alternative 1 Question 2 of 6 7.2 / 12 iii (a) Compute the break-even point in sales dollars for 2021. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to O decimal places, e.g. 2,510.) Break-even point 2,742,750 (b) Compute the break-even point in sales dollars under each of the alternative courses of action for 2022. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to O decimal places, e.g. 2,510.) Break-even point 1. Increase selling price $ 2,109,807.69 2. Change compensation $ 2,650,000 . 3. Purchase machinery $ 747,451.4 Question 2 of 6 7.2 / 12 Cullumber Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 84,800 units of product: net sales $2,120,000; total costs and expenses $2,369,100; and net loss $249,100. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold $1,662,080 $1,113,000 $549,080 Selling expenses 548,020 97,520 450,500 Administrative expenses 159,000 61,480 97,520 $2,369,100 $1,272,000 $1,097,100 Management is considering the following independent alternatives for 2022. 1. Increase unit selling price 25% with no change in costs and expenses. Change the compensationafcalesnarcons from fiyadannualcalaries totaling $212000to totalcalaries of 12 400 lue 50%
