Business
Business, 24.10.2019 17:43, ramanpreet

Pronghorn corp.’s sales slumped badly in 2017. for the first time in its history, it operated at a loss. the company’s income statement showed the following results from selling 515,500 units of product: sales $2,577,500, total costs and expenses $2,680,600, and net loss $103,100. costs and expenses consisted of the amounts shown below. total variable fixed cost of goods sold $2,206,340 $1,639,290 $567,050 selling expenses 257,750 94,852 162,898 administrative expenses 216,510 70,108 146,402 $2,680,600 $1,804,250 $876,350 management is considering the following independent alternatives for 2018. 1. increase unit selling price 21% with no change in costs, expenses, and sales volume. 2. change the compensation of salespersons from fixed annual salaries totaling $154,650 to total salaries of $61,860 plus a 6% commission on sales. (a) compute the break-even point in dollars for 2017. (round final answer to 0 decimal places, e. g. 1,225.) break-even point $ (b) compute the break-even point in dollars under each of the alternative courses of action. (round selling price per unit to 2 decimal places, e. g. 5.25 and other calculations to 0 decimal places, e. g. 20% and also final answer to 0 decimal places, e. g. 1,225.) break-even point for alternative 1 $ break-even point for alternative 2 $ which course of action do you recommend?

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