Please answer question #4: New Break Even Point In Dollar Sales

Morton Companys contribution format income statement for last month is given below:

Sales (41,000 units $27 per unit)$1,107,000 Variable expenses 774,900 Contribution margin 332,100 Fixed expenses 265,680 Net operating income$66,420

Additional Information:

4. Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed. Rather than pay sales commissions, which are currently included in variable expenses, the company would pay salespersons fixed salaries and would invest heavily in advertising. The marketing manager claims this new approach would increase unit sales by 30% without any change in selling price; the company's new monthly fixed expenses would be $567,891; and its net operating income would increase by 20%. Compute the company's break-even point in dollar sales under the new marketing strategy. Complete this question by entering your answers in the tabs below. Refer to the original data. Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed. Rather than pay sales commissions, which are currently included in variable expenses, the company would pay salespersons fixed salaries and would invest heavily in advertising. The marketing manager claims this new approach would increase unit sales by 30% without any change in selling price; the company's new monthly fixed expenses would be $567,891; and its net operating income would increase by 20%. Compute the company's break-even point in dollar sales under the new marketing strategy. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) Show less New break even point in dollar sales New equipment has come onto the market that would allow Morton Company to automate a portion of its operations. Variable expenses would be reduced by $8.10 per unit. However, fixed expenses would increase to a total of $597,780 each month. Prepare two contribution format income statements, one showing present operations and one showing how operations would appear if the new equipment is purchased. (Round "Per Unit" to 2 decimal places.) Show less \begin{tabular}{|l|l|l|l|} \hline Required 1 & Required 2 & Required 3 & Required 4 \\ \hline \end{tabular} Refer to the income statements in (1). For the present operations and the proposed new operations, compute (a) the degree of operating leverage, (b) the break-even point in dollar sales, and (c) the margin of safety in dollars and the margin of safety percentage. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places (i.e. .1234 should be entered as 12.34).) \begin{tabular}{|l|l|r|r|r|r|} \hline & \multicolumn{2}{|c|}{ Present } & \multicolumn{2}{c|}{ Proposed } \\ \hline a. & Degree of operating leverage & 5 & & 10 \\ \hline b. & Break-even point in dollar sales & $ & 885,600 & $1996,300 & \\ \hline c. & Margin of safety in dollars & $ & 221,400 & & $110,700 \\ \hline & Margin of safety in percentage & 20.00 & % & 10.00 & % \\ \hline \end{tabular} Required 1 Required 3>