Question
View Policies Current Attempt in Progress Oriole Inc. had a bad year in 2021. For the first time in its history, it operated at
View Policies Current Attempt in Progress Oriole Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 70,400 units of product: net sales $1,760,000; total costs and expenses $1,966.800; and net loss $206,800. Costs and expenses consisted of the following Total Variable Fixed Cost of goods sold $1,379,840 $924,000 $455,840 Selling expenses 454,960 80,960 374,000 Administrative expenses 132,000 51,040 80,960 $1,966,800 $1,056,000 $910,800 Management is considering the following independent alternatives for 2022. 1 Increase unit selling price 25% with no change in costs and expenses. 2 3 Change the compensation of salespersons from fixed annual salaries totaling $176,000 to total salaries of $35,200 plus a 5% commission on net sales. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50.50
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