Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Tanek Corp.s sales slumped badly in 2017. For the first time in its history, it operated at a loss. The companys income statement showed the

Tanek Corp.s sales slumped badly in 2017. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 500,000 units of product: sales $2,500,000, total costs and expenses $2,600,000, and net loss $100,000. Costs and expenses consisted of the amounts shown below.

Total Variable Fixed Cost of good sold $2,140,000 $1,590,0000 $550,000 Selling expenses 250,000 92,000 158,000 Administrative expenses 210,000 68,000 142,000 Totals $2,600,000 $1,750,000 $850,000

Management is considering the following independent alternatives for 2018.

1) Increase unit selling price 20% with no change in cost, expenses, and sales volume. 2) Change the compensation of salespersons from fixed annual salaries totaling $150,000 to total salaries of $60,000 plus a 5% commission on sales

a) compute the break-even point in dollars for 2017: Break-even point $ ?????????

b) compute the contribution margin under each of the alternative courses of action: contribution margin for alternative 1 ?????? % contribution margin for alternative 2 ??????? %

compute hte break-even point in dollars under each of the alternative courses of action:

break-even point for alternative 1 $ ?????? break-even point for alternative 2 $ ??????

**PLEASE ANSWER ALL THE ABOVE**

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

IFRS edition volume 2

978-0470613474, 470613475, 978-0470616314

More Books

Students also viewed these Accounting questions

Question

Would I want my decision or action to become public knowledge?

Answered: 1 week ago