5. Refer to the original data. The company is considering paying the store manager 50 cents commission on each pair of shoes sold in excess of the break even point. If this change is made, what will be the shops net operating income or loss if 27,100 pairs of shoes are sold?

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 substantial commission on each pair of shoes sold (in addition to a small base salary) in order to encourage them to be aggressive in their sales efforts. The following worksheet contains cost and revenue data for Shop 48 and is typical of the company's many outlets: Per Pair of Shoes Selling price 25.00 Variable expenses: 11.50 Invoice cost Sales commission 3.50 15.00 Total variable expenses Annual Fixed expenses: 44,000 Advertising 34,000 Rent 170,000 Salaries $248,000 Total fixed expenses