Gg.14. Swifty Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed thefollowing results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,795,200; and net loss$235,200. Costs and expenses consisted of the following.Cost of goods soldSelling expensesAdministrative expenses1.2.3.1.Break-even point2.3.Total$1,115,600526,600$153,000$1,795,200Management is considering the following independent alternatives for 2020.Increase selling pricePurchase machineryVariable$628,000Increase unit selling price 25% with no change in costs and expe ses.(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to Odecimal places, e.g. 2,510.)94,000Change the compensation of salespersons from fixed annual salaries totaling $202,000 to total salaries of $40,000 plus a 5%commission on net sales.$Change compensation $58,000Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to50:50.$Fixed(b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to3 decimal places e.g. 0.251 and final answers to O decimal places, e.g. 2,510.)$487,6002030400Which course of action do you recommend?432,600$780,000 $1,015,200Break-even point95,000

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Description: Gg.14. Swifty Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed thefollowing results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,79

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Swifty Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,795,200; and net loss $235,200. Costs and expenses consisted of the following. Cost of goods sold Selling expenses Administrative expenses Total $1,115,600 526,600 153.000 Variable $628,000 94,000 58.000 Fixed $487,600 432,600 95.000

Swifty Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 78,000 units of product: net sales $1,560,000; total costs and expenses $1,795,200; and net loss $235,200. Costs and expenses consisted of the following. Cost of goods sold Selling expenses Administrative expenses Total $1,115,600 526,600 153.000 Variable $628,000 94,000 58.000 Fixed $487,600 432,600 95.000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter5: The Income Statement And The Statement Of Cash Flows

Section: Chapter Questions

Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...

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