Cost -Volume Profit

Anonymous
timer Asked: Mar 2nd, 2018
account_balance_wallet $15

Question description

Go to the P22-3A problem in your text. See the “Do it” example for information on break even analysis (also found in the Digital Book under Course Resources).

Compute the breakeven point for fiscal year 2017.

Compute the breakeven point in dollars under each of the alternative courses of action.

What course of action do you recommend and why?

Respond to the Discussion per your Syllabus guidelines.

Reference

Weygandt, J., Kimmel, P. & Kieso, D. (2015). Accounting principles (12th ed.). Hoboken, NJ: John Wiley & Sons, Inc.

Here’s P22 -3A Below

Tanne’k 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 500,000 units of product: sales $2,500,000 total cost and expenses $2,600,000, and net loss of $100,000. Cost and expenses consisted of the amounts shown below.

Total Variable Fixed

Cost of good sold $2,140,000 $1,590,000 $550,000

Selling expenses $250,000 $92,000 $158,000

Administrative $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 unit selling price 20% with no change in costs, expenses an sales volume.
  2. Change the compensation of sales persons from fixed annual salaries totaling $150,000 to total salaries of $60,000 plus a 5% commission on sales.

Instruction:

  1. Compute the break -even point in dollars for2017.
  2. Compute the break - even point in dollars under each of the alternative course of action. (Round all ratios to nearest full present.) Which course of action do you recommend?

Tutor Answer

Robertmariasi
School: Carnegie Mellon University

Hello there,Please confirm that this i what you needed from me . I am attaching to this message a Microsoft Word file (.docx format) file entitled " Accounting Answers" which contains a step by step guide of how i reached the answers .File name : Accounting AnswersFormat : APAPages : 5 ( 1 page is the cover ,4 is content)* Everything that is in highlight is the task of the problem*I tried to put all the values in a table and color it so it can make the understanding process easier*I wrote it as a step by step guide so you can easily understand what i did there*Everything that is in italic is an answer*Everything that is in italic and also highlighted in yellow is a final answer.----Looking forward to hearing from you .I tried to finish it as fast as possible so you have time to look over it especially because i was not sure how much you had to wait to get a tutor assigned.

Accounting

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Accounting
[Your Name]
Accounting [class number]
March 3 , 2018
[Professor Name]

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Anonymous
Awesome! Exactly what I wanted.

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