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Gorham manufacturing s sales slumped badly in 2012 for the first time in its history it operated at a loss the company s income statement showed the following results from selling 600 000 units of product net sales 2 400 000 total costs and expenses 2 540 000 and net loss 140 000 costs and expenses consisted of the amounts shown below total variable fixed cost of goods sold 2 100 000 1 440 000 660 000 selling expenses 240 000 72 000 168 000 administrative expenses 200 000 48 000 152 000 2 540 000 1 560 000 980 000 management is considering the following independent alternatives for 2013 increase unit selling price 20 with no change in costs expenses and sales volume change the compensation of salespersons from fixed annual salaries totaling 150 000 to total salaries of 60 000 plus a 3 commission on net sales purchase new automated equipment that will change the proportion between variable and fixed cost of goods sold to 54 variable and 46 fixed | |||||||
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