30 Part Two Planming and Decision Making Texas. Althouh same price and Problems Bubba's carries numerous styles of western hats, each hat has approximately invoice (purchase) cost, as shown in the following table. Sales personnel receive a Bubba's Western Wear is a western hat retailer in Lubbock, T ILO S-1, 9-2 9-3) 9-37 CVP Analysis: Strategy Bubba's Western Wear is a westenm 83) 9-37 CVP Analysis Strategy encourage them to be more aggressive in their sales efforts. Currently, the Lubbock econo humming, and sales growth at Bubba's has been great. The businessis very competitive, ho Bubha, the owner, has relied on his knowledgeable and courteous staff to attract and retain c who otherwise might go to other westerm wear stores. Because of the rapid growth in sales, Bubh is also finding the management of certain aspects of the business, such as restocking inventory ara hiring and training new salespeople, more difficult. S 80.00 Sales price Per unit variable expenses [LO 9 Purchase cost Sales commissions 41.50 10.50 S 52.00 Total per unit variable costs Total annual fixed expenses Advertising Rent Salaries $ 98,500 146,500 255,000 $500,000 Total fixed expenses Required 1Calculate the annual breakeven point, both in terms of units and in terms of sales dollars. Show calculations.) a contribution income statement. what interpretive value are these two measures? 2. If Bubba's sells 20,000 hats, what is its before-tax income or loss? Support your answer by constructing 3. If Bubba's sells 32,000 hats, what is its margin of safety (MOS) and margin of safety ratio (MOS%) 4. Bubba is considering the elimination of sales commissions completely and increasing salaries by S. Idoadity and discuss the strategic and ethical issues in the decision to eliminate sales commissions (see t would be the new breakeven point in units? What would be the before-tax incounse or loss if 20,000 hats are sold with the new salary plan? requirement 4) How do these strategic concerns affect Bubba's decision