Pharoah Corp's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 595,500 units of product: sales $2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts. Total Variable Fixed Cost of goods sold $2,528,890 $2,042.565 $486,325 Selling expenses Administrative expenses 297,750 250.110 109.572 188,178 80,988 169.122 $3,076,750 $2,233,125 $843,625 Management is considering the following independent alternatives for 2023. 1. Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume 2. Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total sales remain unchanged. く Your answer is correct. Compute the break-even point in sales dollars for 2022. Break-even point $ 3374500 Compute the contribution margin ratio under each of the alternative courses of action. Contribution margin ratio for alternative 1 Contribution margin ratio for alternative 2 % ୪୧ de % Compute the break-even point in sales dollars under each of the alternative courses of action. Break-even point for alternative 1 +A
Pharoah Corp's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 595,500 units of product: sales $2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts. Total Variable Fixed Cost of goods sold $2,528,890 $2,042.565 $486,325 Selling expenses Administrative expenses 297,750 250.110 109.572 188,178 80,988 169.122 $3,076,750 $2,233,125 $843,625 Management is considering the following independent alternatives for 2023. 1. Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume 2. Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total sales remain unchanged. く Your answer is correct. Compute the break-even point in sales dollars for 2022. Break-even point $ 3374500 Compute the contribution margin ratio under each of the alternative courses of action. Contribution margin ratio for alternative 1 Contribution margin ratio for alternative 2 % ୪୧ de % Compute the break-even point in sales dollars under each of the alternative courses of action. Break-even point for alternative 1 +A
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Transcribed Image Text:Pharoah Corp's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 595,500 units of product: sales
$2,977,500, total costs and expenses $3,076,750, and net loss $99,250. Costs and expenses consisted of the following amounts.
Total
Variable
Fixed
Cost of goods sold
$2,528,890
$2,042.565
$486,325
Selling expenses
Administrative expenses
297,750
250.110
109.572
188,178
80,988
169.122
$3,076,750
$2,233,125 $843,625
Management is considering the following independent alternatives for 2023.
1.
Increase the unit selling price 25% with no change in total costs, total expenses, and sales volume
2.
Change the compensation of sales personnel from fixed annual salaries totaling $178,650 to total salaries of $71,460 plus a 5% commission on sales. All other total costs, total expenses, and total
sales remain unchanged.
く
Your answer is correct.
Compute the break-even point in sales dollars for 2022.
Break-even point
$
3374500
Compute the contribution margin ratio under each of the alternative courses of action.
Contribution margin ratio for alternative 1
Contribution margin ratio for alternative 2
%
୪୧
de
%
Compute the break-even point in sales dollars under each of the alternative courses of action.
Break-even point for alternative 1
+A
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education