=+4-40 KKK CVP analysis, shoe stores OBJECTIVES 1, 2, 4 WalkRite Shoes Ltd operates a chain of shoe stores that sell 10 different styles of inexpensive men’s shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary. Individual salespeople receive a fixed salary and a sales commission. WalkRite Shoes is considering opening another store that is expected to have the revenue and cost relationships shown here:

1 2

3 4

5 6

A B C D E Selling price $30.00 Rent $ 60 000 Cost of shoes $19.50 Salaries 200 000 Sales commission 1.50 Advertising 80 000 Variable cost per unit $21.00 Other fixed costs 20 000 Total fixed costs $360 000 Unit variable data (per pair of shoes) Annual fixed costs Required 1 What is the annual break-even point in:

(a) units sold and

(b) revenues?