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Will give a like if correct Midlands Inc. had a bad year in 2019. For the first time in its history. It operated at a
Will give a like if correct
Midlands Inc. had a bad year in 2019. For the first time in its history. It operated at a loss. The company's income statement showed the following results from selling 78.000 units of product: net sales 51,560,000, total costs and expenses $1,800,000, and net loss $200.000 costs and expenses consisted of the following Cost of goods sold Selling expenses Administrative expenses Total Variable Fixed 51.141.200 5633,000 $508.200 512,800 91.000 421.800 146.000 56.000 90,000 $1,800,000 $780,000 $1.020,000 Management is considering the following independent alternatives for 2020. 1 2 Increase unit selling price 25% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling 5204,000 to total salaries of $44,985 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 3 (a) Compute the break-even point in dollars for 2019. Round contribution margin ratio to 4 decimai places eg. 0.2512 and final answer to decimal places, eg. 2.510) Break-even point (b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places es. 0.251 and final answers to decimal places, es, 2,510) Break-even point 1. Increase selling price $ 2. Change compensation $ 3 Purchase machinery Which course of action do you recommend Step by Step Solution
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