Calculate the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to 0 decimal places, e.3. 15% and final answers to 0 decimal places, e.3. 5,275.)*Break-even point if unit selling price increases by 30%*Break-even point if there is a change in compensation*Break-even point if there is a purchase of new high-tech factory machinery Cullumber Manufacturing's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's incomestatement showed the following results from selling 50,400 units of product: net sales $1,512,000; total costs and expenses$1,688,400; and net loss $176,400. Costs and expenses consisted of the amounts shown below:Cost of goods soldSelling expensesAdministrative expensesTotal$1,134,000403,200Fixed$781,200 $352,800298,20054,600$1,688,400 $982,800 $705,600151,200Variable105,00096,600Management is considering the following independent alternatives for 2023:1. Increase the unit selling price by 30% with no change in costs, expenses, or sales volume.2.Change the compensation of salespersons from fixed annual salaries totalling $168,000 to total salaries of $16,800 plus a 5%commission on net sales.3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to50:50.

Break-even point refers to the situation when there is no loss or no profit or at this point the…

Answered: Cullumber Manufacturing's sales slumped…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Calculate the break-even point in dollars under each of the alternative courses of action. (Round contribution margin ratio to 0 decimal places, e.3. 15% and final answers to 0 decimal places, e.3. 5,275.)

*Break-even point if unit selling price increases by 30%

*Break-even point if there is a change in compensation

*Break-even point if there is a purchase of new high-tech factory machinery

Cullumber Manufacturing's sales slumped badly in 2022. For the first time in its history, it operated at a loss. The company's income
statement showed the following results from selling 50,400 units of product: net sales $1,512,000; total costs and expenses
$1,688,400; and net loss $176,400. Costs and expenses consisted of the amounts shown below:
Cost of goods sold
Selling expenses
Administrative expenses
Total
$1,134,000
403,200
Fixed
$781,200 $352,800
298,200
54,600
$1,688,400 $982,800 $705,600
151,200
Variable
105,000
96,600
Management is considering the following independent alternatives for 2023:
1. Increase the unit selling price by 30% with no change in costs, expenses, or sales volume.
2.
Change the compensation of salespersons from fixed annual salaries totalling $168,000 to total salaries of $16,800 plus a 5%
commission on net sales.
3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to
50:50.

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