Compute the break-even point in dollars for 2014 round

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Reference no: EM13571333

Fredonia Inc. had a bad year in 2013. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 76,500 units of product: Net sales $1,522,350; total costs and expenses $1,762,700; and net loss $240,350. Costs and expenses consisted of the following.

	Total	Variable	Fixed
Cost of goods sold	$1,208,700	$784,100	$424,600
Selling expenses	421,200	76,000	345,200
Administrative expenses	132,800	54,800	78,000
	$1,762,700	$914,900	$847,800

Management is considering the following independent alternatives for 2014.

1.		Increase unit selling price 28% with no change in costs and expenses.
2.		Change the compensation of salespersons from fixed annual salaries totaling $204,600 to total salaries of $44,400 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.

Compute the break-even point in dollars for 2014. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.)

Break-even point

$ ???

Reference no: EM13571333

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