Question
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**
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