Crane Manufacturing's sales slumped badly in 2027 due to so many people purchasing gifts online. The company's income statement
showed the following results from selling 500,000 units of product: net sales $2,135,000; total costs and expenses $2,510,480; and
net loss $375,480. Costs and expenses consisted of the following:
Total
Variable
Fixed
Cost of goods sold
$2,002,480
$1,301,000
$701,480
Selling expenses
204,000
52,000
152,000
Administrative expenses
304,000
152,000
152,000
$2,510,480
$1,505,000
$1,005,480
Management is considering the following alternative for 2028:
Purchase new automated equipment that will change the proportion between variable and fixed expenses to 45% variable and
Your answer is incorrect.
Compute the break-even sales dollars under the alternative course of action. (Round per unit value to 2 decimal places, e.g. 52.75
and final answer to 0 decimal places, e.g. 5,275.)
Break-even sales dollars
$