Fredonia Inc. had a bad year in 2013. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 79,000 units of product: Net sales $1,532,600; total costs and expenses $1,746,900; and net loss $214,300. Costs and expenses consisted of the following.
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|
Total
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|
Variable
|
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Fixed
|
| Cost of goods sold |
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$1,208,500 |
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$784,300 |
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$424,200 |
| Selling expenses |
|
422,900 |
|
79,800 |
|
343,100 |
| Administrative expenses |
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115,500 |
|
40,900 |
|
74,600 |
|
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$1,746,900 |
|
$905,000 |
|
$841,900 |
Management is considering the following independent alternatives for 2014.
(a) Compute the break-even point in dollars for 2014. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.)
| Break-even point |
|
$ 2055920.87 It's right I figured this one out just need answers to the below ones
|
| 1. |
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Increase unit selling price 24% with no change in costs and expenses. |
| 2. |
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Change the compensation of salespersons from fixed annual salaries totaling $195,500 to total salaries of $35,700 plus a 5% commission on net sales. |
| 3. |
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Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. |
(a) Compute the break-even point in dollars for 2014. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.)
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Break-even point
|
| 1. |
|
Increase selling price |
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$1607322.07 This is wrong but I can't figure it out
|
| 2. |
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Change compensation |
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$2386924.99 This is wrong but I can't figure it out
|
| 3. |
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Purchase machinery |
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$2935285.53 This is wrong but I can't figure it out
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