Question: a) break even point if unit selling price increases by 30%. b) break even point if there is a change in compensation. c) break even
Crane Manufacturing'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 49,200 units of product: net sales $1,476,000; total costs and expenses $1,648,200; and net loss $172,200. Costs and expenses consisted of the amounts shown below: Total Fixed Variable $762,600 $1,107,000 $344,400 Cost of goods sold Selling expenses Administrative expenses 393,600 102,500 291,100 147,600 94,300 53,300 $1,648,200 $959.400 $688,800 Management is considering the following independent alternatives for 2023 1. Increase the unit selling price by 30% with no change in costs, expenses, or sales volume, 2. Change the compensation of salespersons from fixe) annual salaries totalling $164,000 to total salaries of $16,400 plus a 5% commission on net sales 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50
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