CVP, shoe stores. (Refer to requirement 3 of 3-26.)

1. Calculate the number of units sold where the operating income under

(a) a fixed salarv plan and

(b) a lower fixed salary and commission plan (for salespeople onlv) would be equal. Above that number of units sold, one plan would be more profitable than the other; below that number of units sold, the reverse would occur.

2. Compute the operating income or loss under each plan in requirement 1 at sales levels of

(a) 50,000 units and

(b) 60,000 units.

3. Suppose the target operating income is SI 68,000. How many units must be sold to reach the target under

(a) the fixed salary plan and

(b) the lower fixed salarv and commission plan?