Blue Spruce Corp.’s sales slumped badly in 2017. For the first time in its history, it operated at a loss. The company’s...
Blue Spruce 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 590,500 units
of product: sales $2,952,500, total costs and expenses $3,070,600,
and net loss $118,100. Costs and expenses consisted of the amounts
shown below.
|
Total |
Variable |
Fixed |
||||
| Cost of goods sold | $2,527,340 | $1,877,790 | $649,550 | |||
| Selling expenses | 295,250 | 108,652 | 186,598 | |||
| Administrative expenses | 248,010 | 80,308 | 167,702 | |||
| $3,070,600 | $2,066,750 | $1,003,850 |
Management is considering the following independent alternatives
for 2018.
| 1. | Increase unit selling price 20% with no change in costs, expenses, and sales volume. | |
| 2. | Change the compensation of salespersons from fixed annual salaries totaling $177,150 to total salaries of $70,860 plus a 6% commission on sales. |
(a) Compute the break-even point in dollars for
2017. (Round final answer to 0 decimal places, e.g.
1,225.)
| Break-even point | $
|
(b) Compute the break-even point in dollars under
each of the alternative courses of action. (Round
selling price per unit to 2 decimal places, e.g. 5.25 and other
calculations to 0 decimal places, e.g. 20% and also final answer to
0 decimal places, e.g. 1,225.)
| Break-even point for alternative 1 | $
|
|
| Break-even point for alternative 2 | $
|
Which course of action do you recommend?
Alternative 1Alternative 2
Homework Answers
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Blue Spruce Corp.’s sales slumped badly in 2017. For the first time in its history, it operated at a loss. The company’s...
Tanek Corp.’s sales slumped badly in 2017. For the first time in its history, it operated at a loss. The company’s incom...
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 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 505,500 units of product: sales $2,527,500, total costs and expenses $2,628,600, and net loss $101,100. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,163,540 $1,607,490 $556,050 Selling expenses 252,750 93,012 159,738 Administrative expenses 212,310 68,748 143,562 $2,628,600 $1,769,250 $859,350 Management is considering the...
Bramble Corp.’s sales slumped badly in 2017. For the first time in its history, it operated...
Bramble 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 555,500 units of product: sales $2,777,500, total costs and expenses $2,888,600, and net loss $111,100. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,377,540 $1,766,490 $611,050 Selling expenses 277,750 102,212 175,538 Administrative expenses 233,310 75,548 157,762 $2,888,600 $1,944,250 $944,350 Management is considering the...
Crane Corp.’s sales slumped badly in 2020. For the first time in its history, it operated...
Crane 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 590,500 units
of product: sales $2,952,500, total costs and expenses $3,050,875,
and net loss $98,375. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,507,615
$2,025,415
$482,200
Selling expenses
295,250
108,652
186,598
Administrative expenses
248,010
80,308
167,702
$3,050,875
$2,214,375
$836,500
Management is considering the...
Problem 11-3 Pina Colada Corp.’s sales slumped badly in 2017. For the first time in its...
Problem 11-3
Pina Colada 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 585,500 units
of product: sales $2,927,500, total costs and expenses $3,044,600,
and net loss $117,100. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,505,940
$1,861,890
$644,050
Selling expenses
292,750
107,732
185,018
Administrative expenses
245,910
79,628
166,282
$3,044,600
$2,049,250
$995,350
Management...
Problem 18-04A Crane Corp.'s sales slumped badly in 2020. For the first time in its history,...
Problem 18-04A Crane 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 590,500 units of product: sales $2,952,500, total costs and expenses $3,050,875, and net loss $98,375. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,507,615 295,250 248,010 $3,050,875 Variable $2,025,415 108,652 80,308 $2,214,375 Fixed $482,200 186,598 167,702 $836,500 Management is...
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. Cost of goods sold Selling expenses Administrative expenses Total $2,358,815 277,750 233,310 $2,869,875 Variable $1,905,365 102,212 75,548 $2,083,125 Fixed $453,450 175,538 157,762 $786,750 Management is considering the...
Your answer is partially correct. Try again. Tanek Corp.'s sales slumped badly in 2017. For the...
Your answer is partially correct. Try again. 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 520,500 units of product: sales $2,602,500, total costs and expenses $2,706,600, and net loss $104,100. Costs and expenses consisted of the amounts shown below. Fixed Cost of goods sold Selling expenses Administrative expenses Total $2,227,740 260,250 218,610 $2,706,600 Variable $1,655,190 95,772 70,788 $1,821,750 $572,550...
Ivanhoe Corp's sales slumped badly in 2020. For the first time in its history, it operated...
Ivanhoe 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 515,500 units of product: sales $2,577,500, total costs and expenses$2,673,960, and net loss $96,460. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,199,700 $1,690,840 $508,860 257,750 94,852 162,898 Administrative expenses 216,510 70,108 146,402 2,673,960 $1,855,800 $818,160 Selling expenses Management is considering the following...
Problem 18-04A Oriole Corp.'s sales slumped badly in 2020. For the first time in its history,...
Problem 18-04A 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 540,500 units of product: sales $2,702,500, total costs and expenses $2,803,440, and net loss $100,940. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,306,180 270,250 227,010 $2,803,440 Variable $1,772,840 99,452 73,508 Fixed $533,340 170,798 153,502 $857,640 $1,945,800 Management is...
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 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...
Crane 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 590,500 units
of product: sales $2,952,500, total costs and expenses $3,050,875,
and net loss $98,375. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,507,615
$2,025,415
$482,200
Selling expenses
295,250
108,652
186,598
Administrative expenses
248,010
80,308
167,702
$3,050,875
$2,214,375
$836,500
Management is considering the...
Problem 11-3
Pina Colada 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 585,500 units
of product: sales $2,927,500, total costs and expenses $3,044,600,
and net loss $117,100. Costs and expenses consisted of the amounts
shown below.
Total
Variable
Fixed
Cost of goods sold
$2,505,940
$1,861,890
$644,050
Selling expenses
292,750
107,732
185,018
Administrative expenses
245,910
79,628
166,282
$3,044,600
$2,049,250
$995,350
Management...
Problem 18-04A Crane 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 590,500 units of product: sales $2,952,500, total costs and expenses $3,050,875, and net loss $98,375. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,507,615 295,250 248,010 $3,050,875 Variable $2,025,415 108,652 80,308 $2,214,375 Fixed $482,200 186,598 167,702 $836,500 Management is...
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. Cost of goods sold Selling expenses Administrative expenses Total $2,358,815 277,750 233,310 $2,869,875 Variable $1,905,365 102,212 75,548 $2,083,125 Fixed $453,450 175,538 157,762 $786,750 Management is considering the...
Your answer is partially correct. Try again. 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 520,500 units of product: sales $2,602,500, total costs and expenses $2,706,600, and net loss $104,100. Costs and expenses consisted of the amounts shown below. Fixed Cost of goods sold Selling expenses Administrative expenses Total $2,227,740 260,250 218,610 $2,706,600 Variable $1,655,190 95,772 70,788 $1,821,750 $572,550...
Ivanhoe 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 515,500 units of product: sales $2,577,500, total costs and expenses$2,673,960, and net loss $96,460. Costs and expenses consisted of the amounts shown below. Total Variable Fixed Cost of goods sold $2,199,700 $1,690,840 $508,860 257,750 94,852 162,898 Administrative expenses 216,510 70,108 146,402 2,673,960 $1,855,800 $818,160 Selling expenses Management is considering the following...
Problem 18-04A 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 540,500 units of product: sales $2,702,500, total costs and expenses $2,803,440, and net loss $100,940. Costs and expenses consisted of the amounts shown below. Cost of goods sold Selling expenses Administrative expenses Total $2,306,180 270,250 227,010 $2,803,440 Variable $1,772,840 99,452 73,508 Fixed $533,340 170,798 153,502 $857,640 $1,945,800 Management is...
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