Midlands Inc. had a bad year in 2016. For the first time in its history,...
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Midlands Inc. had a bad year in 2016. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 77,000 units of product: net sales $2,310,000; total costs and expenses $ 2,180,000; and net loss $-130,000. Costs and expenses consisted of the following. Total Variable Fixed Cost of goods sold Selling expenses Administrative expenses 1,505,000 $1,003,000 $502,000 22,000 92,000 430,000 0,000 93,000 $2,180,000 $1,155,000 $1,025,000 153,000 Management is considering the following independent alternatives for 2017. I. Increase unit selling price 20% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $ 201,000 to total salaries of $ 36,000 plus a 5% commission on net sales. 2, 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50. (a) Compute the break-even point in dollars for 2017.(Round contribution margin ratio to 2 decimal places eg. 0.25 and final answer to O decimal places,eg. 2,510.) Break-even point$
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