Accounting Assignment Compute the break-even point i

For the fist time in its history, it operated at a loss. The company's income statement showed the following results from selling
500,000 units of product: sales $2,500,000 , total costs and expenses $2,600,000, and net loss $100,000. Costs and expenses consisted of the amounts shown below:
Total	Variable	Fixed
Costs of goods sold	$2,140,000	$1,590,000	$550,000
Selling expenses	250,000	92,000	158,000
Adminstrative expenses	210,000	68,000	142,000
$2,600,000	$1,750,000	850,000
Management is considering the following independent alternatives for 2018
1. Increase selling price 20% with no change in costs, expenses, and sales volume .
2. Change the compensation of salesperson from fixed annual salaries totaling $150,000 to total salaries of $60,000 plus a 5% commission on sales.
Instructions
(a) Compute the break-even point in dollars for 2017.
(b) Compute the break-even point dollars under each of the alternatives courses of action, (Round all ratios to nearest full percent). Which course of action do you recommend?

Solution Accounting Assignment Compute the break-even point

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