Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

what is the new break even point in dollar sales Refer to the original data. Rather than purchase new equipment, the marketing manager argues that

image text in transcribed
image text in transcribedwhat is the new break even point in dollar sales
Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed. Rather than pay sales commissions, which are currently included in variable expenses, the company would pay salespersons fixed salaries and would invest heavily in advertising. The marketing manager claims this new approach would increase unit sales by 30% without any change in selling price; the company's new monthly fixed expenses would be $487,942, and its net operating income would increase by 20%. Compute the company's break-even point in dollar sales under the new marketing strategy. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Morton Company's contribution format income statement for last month is given below: X $26 per Sales (49,000 units unit) Variable expenses Contribution margin Fixed expenses Net operating income 1,274,00 $ 0 891,800 382, 2005 305, 760 $ 76, 440

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Forex Trading Manual The Rules Based Approach To Making Money Trading Currencies

Authors: Javier H. Paz

1st Edition

0071782923,0071782931

More Books

Students also viewed these Finance questions