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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 the
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 72,000 units of product: net sales $2,160,000; total costs and expenses $2,412,000; and net loss $252,000. Costs and expenses consisted of the amounts shown below: Cost of goods sold Selling expenses Administrative expenses Total $1,620,000 576,000 216,000 $2,412,000 Variable $1,116,000 150,000 138,000 $1,404,000 Fixed $504,000 426,000 78,000 $1,008,000 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 $240,000 to total salaries of $24,000 plus a 10% 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 - Your answer is partially correct. Calculate the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to O decimal places, eg, 15% and final answers to decimal places, eg. 5,275.) $ Break-even point if unit selling price increases by 30% 2,016,000 $ 2,640,000 Break-even point if there is a change in compensation $ 2,672,361 Break-even point if there is a purchase of new high-tech factory machinery
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