50:50. ) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places eg. 0.2512 and final answer to 0 ecimal places, e.g. 2,510) Break-even point S 2550000 (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 eg. 0.251 and final answers to O decimal places, eg. 2,510)
50:50. ) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places eg. 0.2512 and final answer to 0 ecimal places, e.g. 2,510) Break-even point S 2550000 (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 eg. 0.251 and final answers to O decimal places, eg. 2,510)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Transcribed Image Text:3.
ganggu
commission on net sales.
Break-even point $
1.
(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places eg. 0.2512 and final answer to O
decimal places, e.g. 2,510)
2.
Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to
50:50.
3.
(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 eg. 0.251 and final answers to 0 decimal places, e.g. 2,510.)
Fen
Increase selling price
Change compensation
Purchase machinery
$
2550000
S
Break-even point
QUOTPURI ING www
Which course of action do you recommend?
Alternative 1
V
Transcribed Image Text:Current Attempt in Progress
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 75,000 units of product: net sales $1,500,000; total costs and expenses $1.620,000; and net loss
$120,000. Costs and expenses consisted of the following.
Cost of goods sold
Selling expenses
Administrative expenses
Total
2
Variable
3.
$451.000
$962,000
510,000
148,000
58,000
$1,620,000 $600,000
91.000
Fixed
$511,000
419.000
90,000
Management is considering the following independent alternatives for 2020.
$1.020,000
1. Increase unit selling price 25% with no change in costs and expenses.
Change the compensation of salespersons from foxed annual salaries totaling $205,000 to total salaries of $35,025 plus a 5%
commission on net sales.
Purchase new high-tech factory machinery that will change the proportion between variable and foxed cost of goods sold to
50:50
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