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Tanek Corps sales slumped badly in 2017. For the first time in its history, it operated at a loss. The company's income statement showed the
Tanek Corps sales slumped badly in 2017. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 505,500 units of product: sales $2,527,500, total costs and expenses $2,628,600, and net loss $101,100. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative experises Total Variable Fixed $2,163,540 $1.607,490 $556,050 252,750 93,012 159,738 212,310 68,748 143,562 $2,628,600 $1.769,250 $859.350 Management is considering the following independent alternatives for 2018. 1. Increase unit selling price 24% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $151,650 to total salaries of $60,660 plus a 6% commission on sales. (a) Compute the break-even point in dollars for 2017.(Round final answer to 0 decimal places, e.g. 1,225.) Break-even point $ (b) Compute the contribution margin under each of the alternative courses of action (Round final answer to 0 decimal places, e.g. 1,225.) Contribution margin for alternative 1 Contribution margin for alternative 2 Compute the break-even point in dollars under each of the alternative courses of action. (Round selling price per unit to 2 decimal places, eg. 5.25 and other calculations to 0 decimal places, eg, 20% and also final answer to 0 decimal places, eg. 1,225.) Break-even point for alternative 1 $ Break-even point for alternative 2 $
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