$3-2$ Assignment: McGraw H$...$

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relied on his knowledgeable and courteous staff to attract and retain customers who otherwise might go to other western wear stores. Because of the rapid growth in sales, Bubba is also finding the management of certain aspects of the business more difficult, such as restocking inventory and hiring and training new salespeople.

Sales price

Per unit variable expenses

Purchase cost

Sales commissions

Total per unit variable costs

Total annual fixed expenses

Advertising

Rent

Salaries

Total fixed expenses

Required:

Calculate the annual breakeven point, both in terms of units and in terms of sales dollars.

If Bubba's sells $35,000$ hats, what is its before$-$tax income or loss?

Support your answer by preparing a contribution income statement.

$3.$ If Bubba's sells $48,000$ hats, what is its margin of safety $($MOS$)$ in dollars and MOS ratio?

$4.$ Bubba is considering the elimination of sales commissions completely and increasing salaries by $$309,000$ annually. What would be the new breakeven point in units? What would be the before$-$tax income or loss if $35,000$ hats are sold with the new salary plan?

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $4$

Bubba is considering the elimination of sales commissions completely and inc would be the new breakeven point in units? What would be the before$-$tax in salary plan? $($Do not round intermediate calculations.$)$

$\backslash$table$[[,],[$New breakeven point in units,$],[$Before$-$tax income or loss,$]]$

Required $3$

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