View Policies Current Attempt In Progress Oriole Inc Had A Bad Year In 2021 For The First Time In Its History It Operat 1 (24.33 KiB) Viewed 25 times
View Policies Current Attempt In Progress Oriole Inc Had A Bad Year In 2021 For The First Time In Its History It Operat 2 (19.32 KiB) Viewed 25 times
View Policies Current Attempt in Progress Oriole Inc had a bad year in 2021. For the first time in its history it operated at a loss. The company's income statement showed the following results from selling 70.400 units of product net sales $1.760,000, total costs and expenses $1.966, 800, and net loss $206,800. Costs and expenses consisted of the following Total Variable Fixed Cost of goods sold $1.379,840 $924,000 $455,840 Selling expenses 454.960 30,960 374,000 Administrative expenses 132,000 51,040 80,960 $1,966,800 $1,056,000 $910,800 Management is considering the following independent alternatives for 2022 1 2 Increase unit selling price 25% with no change in costs and expenses Change the compensation of salespersons from fixed annual salaries totaling 5176,000 to total salaries of $35.200 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 5.
(a) Compute the break-even point in sales dollars for 2021. (Round contribution margin ratio to 4 decimal places es 0.25 12 and final answer to O decimal places, eg. 2510.) Break-even points (b) Compute the break-even point in sales dollars under each of the alternative courses of action for 2022. (Round contribution margin ratio to 3 decimal places es. 0.251 and final answers to decimal places, eg 2,510.) Break-even point 1 Increase selling price $ 2 Change compensation $ 3. Purchase machinery $ Which course of action do you recommend?
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