Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 a.) What is Shop 48's annual break-even point in unit sales and dollar sales? b.) If 11,450 pairs of shoes are sold in a

image text in transcribed1

a.) What is Shop 48's annual break-even point in unit sales and dollar sales?

b.) If 11,450 pairs of shoes are sold in a year, what would be Shop 48s net operating income (loss)?

2.) The company is considering paying the Shop 48 store manager an incentive commission of 80 cents per pair of shoes (in addition to the salespersons commission). If this change is made, what will be the new break-even point in unit sales and dollar sales? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)

3.) Refer to the original data. As an alternative to (4) above, the company is considering paying the Shop 48 store manager 55 cents commission on each pair of shoes sold in excess of the break-even point. If this change is made, what will be Shop 48's net operating income (loss) if 14,350 pairs of shoes are sold?

4.)Refer to the original data. The company is considering eliminating sales commissions entirely in its shops and increasing fixed salaries by $33,000 annually. If this change is made, what will be Shop 48's new break-even point in unit sales and dollar sales?

Required information The following information applies to the questions displayed below.j The Fashion Shoe Company operates a chain of women's shoe shops that carry many styles of shoes that are all sold at the same price. Sales personnel in the shops are paid a sales commission on each pair of shoes sold plus a small base salary. The following data pertains to Shop 48 and is typical of the company's many outlets Per Pair of Shoes $ 40.e0 Selling price Variable expenses Invoice cost Sales commission $16.0e 4.00 $ 20.00 Annual Total variable expenses Fixed expenses: Advertising Rent Salaries $ 43,000 35,000 165,000 Total fixed expenses $ 243,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Audit Leadership Elevating The Internal Audit Function To Accelerate Value

Authors: Patricia Kaim

1st Edition

1032557168, 978-1032557168

More Books

Students also viewed these Accounting questions

Question

Can someone help with the check points I can not figure out?

Answered: 1 week ago