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Sheridan 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
Sheridan 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 68,400 units of product: net sales $2,052,000; total costs and expenses $2,291,400; and net loss $239,400. Costs and expenses consisted of the amounts shown below: Variable Total $1,539,000 Fixed $478,800 $1,060,200 Cost of goods sold Selling expenses 547,200 142,500 404,700 Administrative expenses 205,200 131,100 74,100 $2,291,400 $1,333,800 $957,600 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 $228,000 to total salaries of $22,800 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. Calculate the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to O decimal places, e.g. 15% and final answers to 0 decimal places, e.g. 5,275.) $ Break-even point if unit selling price increases by 30% $ Break-even point if there is a change in compensation $ $ Break-even point if there is a purchase of new high-tech factory machinery
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