Reference no: EM13574931

Fredonia Inc. had a bad year in 2013. For the first time in its history, it operated at a loss. The companys income statement showed the following results from selling 79,000 units of product: Net sales $1,532,600; total costs and expenses $1,746,900; and net loss $214,300. Costs and expenses consisted of the following.

		Total		Variable		Fixed
Cost of goods sold		$1,208,500		$784,300		$424,200
Selling expenses		422,900		79,800		343,100
Administrative expenses		115,500		40,900		74,600
		$1,746,900		$905,000		$841,900

 

Management is considering the following independent alternatives for 2014.

(a) 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

$2055920.87 It's right I figured this one out just need answers to the below ones

1.		Increase unit selling price 24% with no change in costs and expenses.
2.		Change the compensation of salespersons from fixed annual salaries totaling $195,500 to total salaries of $35,700 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.

(a) 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
1.		Increase selling price		$1607322.07 This is wrong but I can't figure it out
2.		Change compensation		$2386924.99 This is wrong but I can't figure it out
3.		Purchase machinery		$2935285.53 This is wrong but I can't figure it out