206,000 49,440 156,560 $2,616,200 $1,606,800 $1,009,400 Management is considerin

Question

206,000

49,440

156,560

$2,616,200

$1,606,800

$1,009,400

Management is considering the following independent alternativesfor 2011.

$

Which course of action do you recommend?

12

Gorham Manufacturing's sales slumped badly in2010. For the first time in its history, it operated at a loss. Thecompany's income statement showed the following results fromselling 618,000 units of product: Net sales $2,472,000; total costsand expenses $2,616,200; and net loss $144,200. Costs and expensesconsisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,163,000 $1,483,200 $679,800 Selling expenses 247,200 74,160 173,040 Administrative expenses

206,000

49,440

156,560

$2,616,200

$1,606,800

$1,009,400

Management is considering the following independent alternativesfor 2011.

1. Increase unit selling price 20% with no change in costs,expenses, and sales volume.
2. Change the compensation of salespersons from fixed annualsalaries totaling $216,300 to total salaries of $61,800 plus a 5%commission on net sales.

Explanation / Answer

x.j5pute the break-even point in dollars for 2010.

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.