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Oriole Corp.'s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement showed the
Oriole Corp.'s sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 555,500 units of product: sales $2,777,500, total costs and expenses $2,869,875, and net loss $92,375. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,358,815 277,750 233,310 $2,869,875 Variable $1,905,365 102,212 75,548 $2,083,125 Fixed $453,450 175,538 157,762 $786,750 Management is considering the following independent alternatives for 2021. 1. Increase unit selling price 25% with no change in costs, expenses, and sales volume. 2. Change the compensation of salespersons from fixed annual salaries totaling $166,650 to total salaries of $66,660 plus a 5% commission on sales. Compute the break-even point in dollars for 2020. Break-even point & Compute the contribution margin under each of the alternative courses of action. Contribution margin for alternative 1 Contribution margin for alternative 2 Compute the break-even point in dollars using the contribution margin ratio under each of the alternative courses of action. Break-even point for alternative 1 s Break-even point for alternative 2 Which course of action do you recommend
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