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# Problem 19-1A (Part Level Submission) Fredonia Inc. had a bad year in 2013. For the first time in its history, it operated at a loss.

Problem 19-1A (Part Level Submission) Fredonia Inc. had a bad year in 2013. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 75,200 units of product: Net sales \$1,466,400; total costs and expenses \$1,722,900; and net loss \$256,500. Costs and expenses consisted of the following.

 Total Variable Fixed Cost of goods sold \$1,197,100 \$775,900 \$421,200 Selling expenses 413,500 71,700 341,800 Administrative expenses 112,300 48,600 63,700 \$1,722,900 \$896,200 \$826,700

Management is considering the following independent alternatives for 2014.

 1 Increase unit selling price 26% with no change in costs and expenses. 2 Change the compensation of salespersons from fixed annual salaries totaling \$204,100 to total salaries of \$40,100 plus a 5% commission on net sales. 3 Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.
(a) Compute the break-even point in dollars for 2014. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answers to 0 decimal places, e.g. 2,510.)

 Break-even point \$

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