2.

Prepare a CVP graph and a profit graph for the store from zero pairs up to 70,000 pairs of sandals sold each year. Indicate the break-even point on the graph. (Use the line tool to draw a single line (Total Sales, Fixed Expense, Total Expense, Profit). This line should only contain the two endpoints. Use the point tool (Break Even Point) to plot the Break Even Point. For your graph to grade correctly, you must enter the exact x and y coordinates for each endpoint. Once all points have been plotted, click on the line (not individual points) and a tool icon will pop up. You can use this to enter exact co-ordinates for your points as needed. To remove a line/point from the graph, click on the line/point and select delete option.)

Angie Silva has recently opened The Sandal Shop in Brisbane, Australia, a store that specializes in fashionable sandals. Angie has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of sandal shops. As a first step, she has prepared the following analysis for her new store: Sales price per pair of sandals 4.00 1.20 Variable expense per pair of sandals Contribution margin per pair of sandals 2.80 Fixed expense per year: s 30,000 Building rental Equipment depreciation 11,000 Selling 98,600 Administrative 34,000 Total fixed expense $173,600 Required: 1. How many pairs of sandals must be sold each year to break even? What does this represent in total dollar sales? Break-even point in unit pairs Break-even point in dollar