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Sandhill Manufacturing's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed
Sandhill Manufacturing's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 58,800 units of product: net sales $1,764,000; total costs and expenses $1,969,800; and net loss $205,800. Costs and expenses consisted of the amounts shown below: Cost of goods sold Total $1,323,000 Variable $911,400 Fixed $411,600 Selling expenses 470,400 122,500 347,900 Administrative expenses 176,400 112,700 63,700 $1,969,800 $1,146,600 $823.200 Management is considering the following independent alternatives for 2023: 1 Increase the unit selling price by 30% with no change in costs, expenses, or sales volume. 2. Change the compensation of salespersons from fixed annual salaries totalling $196,000 to total salaries of $19,600 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) Calculate the break-even point in dollars for 2022. Break-even point $
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