Question

Midands Inc. had a bad year in 2019. For the first time in its product: net sales $1,500,000; total costs and expenses $1,900,000; and net loss $400,000. Costs and expenses consisted of the following history, it operated at a loss. The company's income statement showed the following results from selling 75,000 units of Total Variable Fixed Cost of goods sold Selling expenses Administrative expenses $1,240,000 755,000 90,000 55,000 $900,000 515,000 145,000 1,900,000 $465,000 425,000 90,000 $1,000,000 Management is considering the following independent alternatives for 2020. 1. Increase unit selling price 20% with no change in costs and expenses. 2. Change the compensation of salespersonis from fixed annual salaries totaling $195,000 to total salaries of $3s,000 plus a 5% commission on set sales. 3. Purchase new high-tech factory machinery that wil change the proportion between variable and fixed cost of goods sold to s0-50 (o) Compute the break-even point in dollars for 2019. (Round contribution maroin ratio to it decimal places e.o o2512 and final anssver to o decimal places, e.g. 2,s10) Break-even point (b) Compute the break-even point in dolars under each of the alternative tourses of action for 2020. (Round onswers to 0 decimal places,o.g. 2,510.) contribution margin ratio to 3 decimal places e.g.0.251 and final Break even point 1. Increase selling price 2. Change compensation 3. Purchase machinery

Answer 1

			Answer
(a) Break Even Point			$   25,00,000.00
(b) Break Even Point
1. Increase Selling Price			$   20,00,000.00
2. Change Compensation			$   24,00,000.00
3.Purchase Machnery			$   23,16,326.53