CVP, shoe stores. (20-25 minutes) Refer to requirement 3 of 8-24.

REQUIRED 1. Calculate the number of units sold where the operating profit under

(a) a fixed-salary plan, and

(b) a lower fixed-salary and commission plan (for salespeople only) 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. Calculate the operating profit 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 profit is £168,000. How many units must be sold to reach the target under

(a) the fixed-salary plan, and

(b) the lower fixed-salary and commission plan? lop5