6 The Walker Shoe Company operates a chain of shoe stores. The stores sell 10 different styles of inexpensive men's shoes with identical unit costs and selling prices. A unit is defined as a pair of shoes. Each store has a store manager who is paid a fixed salary Individual salespeople receive sales commission and a fixed salary. The company is trying to determine whether to open another store, which is expected to have the following revenue and cost relationships: Unit variable data.fper pair of shoes Selling price $45.00 Cost of shoes $33.50 1 Sales commissions 2.40 2 Variable costs per unit $35.90 3 Annual fixed costs: Rent $60,000 200,000 Salaries Advertising Other fixed costs 80.000 20.000 Total fixed costs $360,000 [] 1 e Required (show calculations to receive credit): 1.(4 points) Given the information above, (a) what is the annual breakeven point in units sold and (b) the breakeven point in revenue dollars? 2. (4 points) If sales commissions were discontinued for individual salespeople in favor of a $95,000 increase in fixed salaries, what would be the annual breakeven point in units sold? 3. (4 points) At what level of sales units (ie., pairs of shoes) should the firm be indifferent between the compensation plan in the original data and the new compensation plan described in (2)? 4. (4 points) Refer to your answer in (3). If sales are expected to be 45,000 units, which compensation plan should be chosen? Explain your answer and provide supporting calculations. 5.(5 points) Refer to the original data. If the new store must earn an after-tax profit of at least $100,000 and the corporate tax rate is 35%, what should be the selling price per unit if sales are expected to be 45,000 units?