DessertsPlus Inc. was founded 2 years ago and has had declining sales for the past 2 years:

The most recent income statement for 2022 shows the following results selling 104,535 units which resulted in sales of $2,404,305:

DessertsPlus Income Statement: 2022	Total	Variable	Fixed
Cost of goods sold	$2,120,000	$1,591,655	$528,345
Selling expenses	245,920	90,990	154,930
Administrative expenses	197,160	67,034	130,126
	$2,563,080	$1,749,679	$813,401

The owners are considering the following independent alternatives going forward for the coming year.

Increasing the unit prices by either 15% and 20% without changing selling and administrative expenses.

Moving their business to a less expensive lease location saving the company $120,000 per year.

Change the compensation of sales personnel from fixed annual salaries totaling $150,000 to total salaries of $60,000 plus 4% commission on sales. All other total costs total expenses and total sales remain unchanged.

Provide the following:

Compute and explain the break-even point in sales dollars for 2022.

Compute and explain the break-even point in sales dollars under each of the alternative courses of action.

What course of action do you recommend and why?

Answer rating: 100% (QA)

The question is complete Lets start answering To find the breakeven point in sales dollars we need to calculate the fixed costs and the contribution m... View the full answer