Slip Shod Ltd has provided the following production and sales information for each pair of its dress shoes:

Direct materials Direct labour Variable factory overhead Selling price Sales commissions

$ 1

22 35 15 1800%

of the selling price

The fixed costs for the period are $1125000.

Required

A. Calculate the break-even point.

B. Calculate the number of pairs that must be sold to achieve a profit of $63 000. What is the margin for safety at this sales level?

C. Would it be better to sell 16 000 pairs at a selling price of $180 each or 19 000 pairs at a selling price of $160?

D. If an additional $63 270 is spent on fixed advertising costs, what level of dollar sales must be attained to earn a new profit of $36 000? Assume that there has been no change in the sales price.

E. Assume an income tax rate of 30%. Using the given information, how many pairs of shoes need to be sold to earn an after-tax profit of $37 800?