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The condensed income statement for the Sheridan and Paul partnership for 2020 is as follows. Sheridan and Paul Company Income Statement For the Year Ended

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The condensed income statement for the Sheridan and Paul partnership for 2020 is as follows. Sheridan and Paul Company Income Statement For the Year Ended December 31, 2020 Sales ( 300,000 units) $1,500,000 Cost of goods sold 1,040,000 Gross profit 460,000 Operating expenses Selling $350,000 Administrative 157,500 507,500 Net loss $( 47,500) A cost behavior analysis indicates that 75% of the cost of goods sold are variable, 42% of the selling expenses are variable, and 40% of the administrative expenses are variable. (a) Your answer is correct. Compute the break-even point in total sales dollars for 2020. (Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 2,520.) Break-even point in dollars $ 1639706 i (b) Your answer is correct. Sheridan has proposed a plan to get the partnership "out of the red" and improve its profitability. She feels that the quality of the product could be substantially improved by spending $ 0.25 more per unit on better raw materials. The selling price per unit could be increased to only $5.25 because of competitive pressures. Sheridan estimates that sales volume will increase by 25%. Compute the net income under Sheridan's proposal and the break-even point in dollars. (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to 0 decimal places, e.g. 2,520.) Amount Net income $ 80000 Break-even point $ 1721742 i Paul was a marketing major in college. He believes that sales volume can be increased only by intensive advertising and promotional campaigns. He therefore proposed the following plan as an alternative to Sheridan's: (1) increase variable selling expenses to $ 0.59 per unit, (2) lower the selling price per unit by $ 0.25, and (3) increase fixed selling expenses by $ 44,000. Paul quoted an old marketing research report that said that sales volume would increase by 60% if these changes were made. Compute the net income under Paul's proposal and the break-even point in dollars. (Round intermediate calculations to 4 decimal places, e.g. 15.2515 and final answers to O decimal places, e.g. 2,520.) Amount Net income $ Break-even point $

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