Question
In: Accounting
George Corporation sales slumped badly in 2020. For the first time in its history, it operated...
George Corporation sales slumped badly in 2020. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 555,500 units of product: sales $2,777,500, total costs and expenses $2,869,375, and net loss $91,875. Costs and expenses consisted of the amounts shown below.
Total Variable Fixed
Cost of goods sold $2,358,315 $1,905,365 $452,950
Selling expenses 277,750 102,212 175,538
Administrative expenses 233,310 75,548 157,762
$2,869,375 $2,083,125 $786,250
Management is considering the following independent alternatives
for 2021.
| 1. | Increase unit selling price 25% with no change in costs, expenses, and sales volume. | |
| 2. | Change the compensation of salespersons from fixed annual salaries totaling $166,650 to total salaries of $66,660 plus a 5% commission on sales. |
a) Compute the break-even point in dollars for 2020.
Break-even point $______
b) Compute the contribution margin under each of the alternative courses of action
contribution margin for alternative 1: ____%
contribution margin for alternative 2: ____%
c) Compute the break-even point in dollars under each of the alternative courses of action.
Break-even point for alternative 1: $______
Break-even point for alternative 2: $________
d) Which course of action do you recommend alternative 1 or alternative 2?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Oriole Corp.’s sales slumped badly in 2020. For the first time in its history, it operated...
Oriole Corp.’s sales slumped badly in 2020. For the first time
in its history, it operated at a loss. The company’s income
statement showed the following results from
selling 555,500 units of product: sales $ 2,777,500,
total costs and expenses $ 2,869,875, and net loss $ 92,375. Costs
and expenses consisted of the amounts shown below.
Total Variable Fixed
Cost of goods sold
$ 2,358,815
$ 1,905,365
$ 453,450
Selling expenses
277,750
102,212
175,538
Administrative expenses
233,310
75,548
157,762
Management is...
Sandhill Corp.’s sales slumped badly in 2020. For the first time in its history, it operated...
Sandhill Corp.’s sales slumped badly in 2020. For the first
time in its history, it operated at a loss. The company’s income
statement showed the following results from selling 585,500 units
of product: sales $2,927,500, total costs and expenses $3,035,440,
and net loss $107,940. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,496,780
$1,920,440
$576,340
Selling expenses
292,750
107,732
185,018
Administrative expenses
245,910
79,628
166,282
$3,035,440
$2,107,800
$927,640
Management is considering the...
Blossom Corp.’s sales slumped badly in 2020. For the first time in its history, it operated...
Blossom Corp.’s sales slumped badly in 2020. For the first time
in its history, it operated at a loss. The company’s income
statement showed the following results from selling 505,500 units
of product: sales $2,527,500, total costs and expenses $2,611,625,
and net loss $84,125. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,146,565
$1,733,865
$412,700
Selling expenses
252,750
93,012
159,738
Administrative expenses
212,310
68,748
143,562
$2,611,625
$1,895,625
$716,000
Management is considering the...
Johnson's Corp sales slumped badly in 2017. For the first time in its history, it operated...
Johnson's Corp sales slumped badly in 2017. For the first time
in its history, it operated at a loss. The company’s income
statement showed the following results from selling 540,500 units
of product: sales $2,702,500, total costs and expenses $2,810,600,
and net loss $108,100. Costs and expenses consisted of the amounts
shown below. Total Variable Fixed Cost of goods sold $2,313,340
$1,718,790 $594,550 Selling expenses 270,250 99,452 170,798
Administrative expenses 227,010 73,508 153,502 $2,810,600
$1,891,750 $918,850 Management is considering the...
Tanek Corp.’s sales slumped badly in 2017. For the first time in its history, it operated...
Tanek Corp.’s sales slumped badly in 2017. For the first time in
its history, it operated at a loss. The company’s income statement
showed the following results from selling 500,500 units of product:
sales $2,502,500, total costs and expenses $2,602,600, and net loss
$100,100. Costs and expenses consisted of the amounts shown
below.
Total
Variable
Fixed
Cost of goods sold
$2,142,140
$1,591,590
$550,550
Selling expenses
250,250
92,092
158,158
Administrative expenses
210,210
68,068
142,142
$2,602,600
$1,751,750
$850,850
Management is considering the...
Tanek Corp.’s sales slumped badly in 2017. For the first time in its history, it operated...
Tanek Corp.’s sales slumped badly in 2017. For the first time in
its history, it operated at a loss. The company’s income statement
showed the following results from selling 525,500 units of product:
sales $2,627,500, total costs and expenses $2,732,600, and net loss
$105,100. Costs and expenses consisted of the amounts shown below.
Total Variable Fixed Cost of goods sold $2,249,140 $1,671,090
$578,050 Selling expenses 262,750 96,692 166,058 Administrative
expenses 220,710 71,468 149,242 $2,732,600 $1,839,250 $893,350
Management is considering the...
Tanek Corp.’s sales slumped badly in 2017. For the first time in its history, it operated...
Tanek Corp.’s sales slumped badly in 2017. For the first time in
its history, it operated at a loss. The company’s income statement
showed the following results from selling 575,500 units of product:
sales $2,877,500, total costs and expenses $2,992,600, and net loss
$115,100. Costs and expenses consisted of the amounts shown
below.
Total
Variable
Fixed
Cost of goods sold
$2,463,140
$1,830,090
$633,050
Selling expenses
287,750
105,892
181,858
Administrative expenses
241,710
78,268
163,442
$2,992,600
$2,014,250
$978,350
Management is considering the...
Problem 22-3A Tanek Corp.’s sales slumped badly in 2017. For the first time in its history,...
Problem 22-3A Tanek Corp.’s sales slumped badly in 2017. For the
first time in its history, it operated at a loss. The company’s
income statement showed the following results from selling 550,500
units of product: sales $2,752,500, total costs and expenses
$2,862,600, and net loss $110,100. Costs and expenses consisted of
the amounts shown below. Total Variable Fixed Cost of goods sold
$2,356,140 $1,750,590 $605,550 Selling expenses 275,250 101,292
173,958 Administrative expenses 231,210 74,868 156,342 $2,862,600
$1,926,750 $935,850 Management is...
A business operated at 100% of capacity during its first month, with the following results: Sales...
A business operated at 100% of capacity during its first month,
with the following results:
Sales (112 units)
$560,000
Production costs (140 units):
Direct materials
$70,000
Direct labor
17,500
Variable factory overhead
31,500
Fixed factory overhead
28,000
147,000
Operating expenses:
Variable operating expenses
$5,860
Fixed operating expenses
3,680
9,540
The amount of operating income that would be reported on the
variable costing income statement is
a.$559,860
b.$427,260
c.$458,940
d.$550,460
A business operated at 100% of capacity during its first month, with the following results: Sales...
A business operated at 100% of capacity during its first month,
with the following results:
Sales (106 units)
$498,200
Production costs (132 units):
Direct materials
$67,065
Direct labor
17,123
Variable factory overhead
29,965
Fixed factory overhead
28,539
142,692
Operating expenses:
Variable operating expenses
$6,403
Fixed operating expenses
4,854
11,257
The amount of operating income that would be reported on the
absorption costing income statement is
a.$395,275
b.$400,129
c.$372,357
d.$498,068
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- While technology is a great tool it should not be the absolute answer when it comes...
- Beginning with the Weizsäcker semi-empirical mass formula, show that the minimum in a mass parabola occurs...
- A. Answer the following questions: Describe the two general roles of an operating system and elaborate...
- QUESTION 1 If the metallic ball is launched at an angle of 25° above the horizontal...
- i need the solution with comsol Consider a large plane wall of thickness L 5 0.4...
- Stem cells have the potential to treat many diseases such as diabetes and Parkinson’s. These diseases...
- Walmart entered in some countries through acquisitions and in some countries through greenfield investment. What entry...
ADVERTISEMENT